Chrysler IPO postponed until 2014 over US tax issue

Article by Anita Panait, on November 27, 2013

Chrysler Group will not hold an initial public offering this year as it needs to deal with a tax issue first in the United States, two sources privy with the process told Reuters. One of the sources said that Chrysler has already notified underwriters of the decision. Fiat issued a statement saying that it would "not be practicable" to complete a Chrysler IPO this year.

Chrysler had sought to launch the share sale in early December. The sources disclosed that plans were delayed, no thanks to complications involving the conversion of Chrysler from a limited liability company to a C corporation. According to Peter Bible, chief risk officer of accounting firm EisnerAmper, most public companies are C corporations, and conversion to this structure might mean additional taxes.

Being a limited liability corporation, Chrysler has few shareholders with its owners bearing the losses and paying the taxes. On the other hand, a C corporation pays its own taxes. It also has no limit on the number of shareholders and faces a greater tax burden.

The delay could also hamper the efforts of chief executive Sergio Marchionne to buy out the minority shareholder at Chrysler and eventually merge it with Fiat to create a company that is large enough to compete with global carmakers.

A merged Fiat-Chrysler would be the seventh-largest carmaker in the world. While Marchionne said he prefers avoiding an IPO for Chrysler, he was forced to file IPO documents in late September after failing to strike a buyout agreement with the other Chrysler owner, the VEBA trust.

If you liked the article, share on:

Topics: chrysler, ipo

Comments

Recommended

November 17 is considered a very special day for Tesla, as this is the day that they revealed the highly anticipated Tesla Semi. But Elon Musk did not think the...
by - November 17, 2017
More details have emerged about the new sixth generation of the BMW M3 just as the German premium practically announced the end of the current-gen 3 Series with the unveiling...
by - November 17, 2017
All is set for Volkswagen’s plans to enter the electric vehicle game, as prompted by the so-called Dieselgate scandal. In fact, the German carmaker has already made a commitment to...
by - November 17, 2017
As BMW has already revealed, the next generation of the BMW M5 (F90) is a four-wheel drive high-performance sedan with overwhelming power output and torque at its disposal. However, it...
by - November 17, 2017
McLaren unveiled a one-off Gold - on - Black 720S at the 2017 Dubai Motor Show which will be on display throughout the entire stretch of this week’s event. The...
by - November 16, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries