Chrysler Eyes New York Stock Exchange $12bn IPO [VIDEO]
By m rochan | November 27, 2013 2:07 AM EST
Fiat's US arm Chrysler is eyeing a flotation on the New York Stock Exchange (NYSE) that is expected to value the bailed out US automaker at anywhere between $9bn and $12bn.
In a regulatory filing on 25 November, Chrysler said it proposes to list its shares on the NYSE under the symbol "CGC."
Chrysler expects to raise between $1.5bn and $2bn (£1.2bn, €1.5bn) through the share sale, reported The Wall Street Journal.
Fiat said it expects Chrysler to go public in the first quarter of 2014.
However, Fiat added that no assurance could be given as to "whether or when an offering will be launched as any launch will be subject to market conditions and other relevant considerations".
Sergio Marchionne, chief executive of both firms, was looking to kick off the IPO road show in early December, but that was deferred after a US tax issue surfaced.
In addition, Chrysler's board of directors "determined that it will not be practicable for [the] Chrysler Group to launch and complete an initial public offering prior to the end of 2013", Fiat said in a statement.
"Nobody really believes there will be an IPO, but any delay in the IPO process means there will be a delay in the two parties striking a deal," a Milan-based analyst told Reuters. "The stock is reacting on the uncertainty."
Fiat's stock was trading 0.35% lower at 14:50 hrs GMT in Milan, after dropping 3.5% in the previous trading session.
Chrysler decided to list itself in September, succumbing to pressure from its second-largest shareholder, the United Auto Workers (UAW) Trust Fund
Fiat wants to buy the 41.5% of Chrysler it does not already own to cut borrowing costs and access some of Chrysler's cashflow.
However, UAW, which holds the 41.5%, pushed Chrysler to sell shares to the public after negotiations to sell them to Fiat failed. The UAW demanded more than $5bn for its shares.
UAW's entire Chrysler portfolio amounts to 676,000 shares. The union became Chrysler's second-largest shareholder when the automaker emerged from bankruptcy in 2009, after UAW traded future healthcare payments owed to it for a stake in the company.
VEBA manages those healthcare benefits on behalf of the union.
Fiat acquired a 20% stake in Chrysler in 2009, in a deal brokered by the US government.
Since then, Marchionne has turned around a dying business, repaid Chrysler's government loans, and increased Fiat's stake in US automaker to 58.5%.
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