Fiat Chrysler Automobiles could sell as much as $830 million of shares following its initial public offering in New York, according to calculations made by Reuters. The merger of Italian carmaker Fiat and American group Chrysler will have its shares registered and start trading on October 13, 2014, Monday at Wall Street.
The carmaker’s chief executive, Sergio Marchionne, remarked he could "get the machine rolling" by selling the shares Fiat owns in itself – the so-called treasury stock – to investors in the United States. Fiat could likewise sell shares to offset those brought back from investors who opted out from the merged company.
There are worries that FCA may struggle to create enough liquidity for its shares in the US, as the company will still have a secondary listing in Milan. Marchionne, however, expressed confidence that Chrysler's high-profile name in the US should help attract interest to the newly formed company.
Fiat recently disclosed that investors who sold out their shares after deciding not to be part of the new company left around 53.9 million shares, which are to be cancelled under Italian laws. FCA will not offer those shares and will pay the cash exit price of EUR7.727 ($9.845) each.
Since those shares could be reissued, Marchionne said Fiat will sell the equivalent of those shares on Wall Street. Fiat also owns another 34.6 million shares in treasury stock.
This means that FCA may issue and sell around 88.5 million shares valued at EUR650 million ($830 million). Marchionne, however, said that the timing for selling both type of shares would be determined after the evaluation of all risks.