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Big Uncertainties Await as Fiat Chrysler Goes Public

Marchionne “SWAG”gers.

by on Oct.13, 2014

Fiat Chrysler commemorated its listing on the NYSE with a banner outside of the NYSE.

It may be in the car business, but shares of the new Fiat Chrysler Automobiles have been riding a rollercoaster during their first day of trading on the New York Stock Exchange under the symbol FCAU.

Hoping to attract investors who want a piece of the Chrysler comeback story, the newly merged company will be offering shares on both the Milan and NY exchanges. But it appears that the market isn’t quite what sure to make of the trans-Atlantic automaker. FCAU opened in the Big Apple at $9 a share, surged to $9.55 and then quickly settled back. The stock, which had dropped as low as $8.84, closed the day at $8.92.

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“Today marks the beginning of our journey as one global automaker, one FCA,” declared CEO Sergio Marchionne in a statement marking the start of Monday’s trading. But over the weekend, the executive who almost singlehandedly pushed through the alliance acknowledged, “I have no idea” how the market will react, suggesting the best he could offer was  “SWAG,” or “scientific wild-ass guess, that the stock will “do well” in the “medium to long-term.” (more…)

Chrysler Wants IPO Ready by Year-End

“That horse left the barn,” says CEO Marchionne.

by on Oct.30, 2013

Fiat-Chrysler CEO Sergio Marchionne at an awards ceremony for suppliers.

After repeatedly delaying plans for a public stock offering and then suggesting Fiat might sever its ties with Chrysler if it went ahead with an IPO, the CEO of the two automakers now says he’s ready to put the process into overdrive.

“That horse left the barn,” Chief Executive Officer Sergio Marchionne told reporters and analysts during a news conference called to discuss the maker’s third-quarter earnings. “We are now bent on executing the IPO.  I hope that we can get it done by the end of this year.”

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Fiat initially acquired a 20% stake in the U.S. maker following Chrysler’s emergence from bankruptcy in mid-2009.  Through a series of steps it has increased its holdings to 58.5%, and Marchionne has repeatedly expressed Fiat’s interest in acquiring the remaining 41.5% held by a union retiree health care trust. But the two sides are battling over the worth of the United Auto Workers Union’s holdings in a Delaware court and the union is now pressing to let the market set the price with an IPO.

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Chrysler Could Delay IPO Until Next Year

That’s if it isn’t canceled entirely.

by on Oct.03, 2013

Chrysler CEO Sergio Marchionne with former UAW President Bob King who ran the union when it received its stake in Chrysler.

Plans for an initial public offering of Chrysler stock could be delayed until next year, Sergio Marchionne, the CEO of both Chrysler and its Italian partner Fiat now says.

Speaking to reporters during a visit to his hometown in Italy, Marchionne cautioned that he doesn’t know if work on the planned IPO can be completed before the North American International Auto Show in Detroit next January.

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An IPO is “technically possible” in 2013 though it is increasingly likely to require waiting until 2014, according to the CEO. And that’s if one takes place at all.  Though Marchionne initially expressed interest in offering Chrysler shares after Fiat came to the rescue of the U.S. automaker in 2009, he has since shied away from that approach, indicating a preference for having Chrysler completely taken over by its European ally.

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Chrysler IPO Reveals Strengths, Weaknesses – and Threat Fiat Could Abandon Alliance

“First ever” small crossover vehicle in development.

by on Sep.24, 2013

Fiat is warning it could walk away from its alliance with Chrysler - which has helped the US maker develop new products like the Jeep Cherokee.

Chrysler Group’s new IPO filing offers some deep insight into the turnaround at a company that has made some significant gains since emerging from Chapter 11 bankruptcy just four years ago but which still has a number of serious challenges to deal with as it continues to merge its operations with those of Italian-based automaker Fiat SpA.

Among other things, the filing itself reveals some of the plans in the works for new vehicles aimed at filling the numerous gaps in the Chrysler line-up, including a “first ever” small crossover-utility vehicle now under development.

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But the filing also raises the possibility that Fiat could abandon its alliance with the U.S. automaker, a relationship it launched in 2009 after Chrysler emerged from bankruptcy with the help of billions of dollars in federal aid.

“Fiat has informed us that it is reconsidering the benefits and costs of further expanding its relationship with us,” Chrysler warned in its S-1 filing with the U.S. Securities and Exchange Commission.

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Chrysler Files for IPO

Stock offering follows failure to resolve dispute between Fiat and the UAW.

by on Sep.23, 2013

Fiat/Chrysler CEO Sergio Marchionne returns to the IPO alternative as his dispute with the UAW drags on.

Chrysler Group LLC is filing for an IPO, a step that Sergio Marchione, the CEO of both Chrysler and its Italian ally Fiat, had hoped to avoid.

The move is a step of last resort, the result of an ongoing dispute between Fiat, which owns a majority stake in the U.S. maker, and the union retirement health care trust that holds the remaining 41.5% stake in Chrysler. The two are currently battling in the Delaware courts over the value of the so-called VEBA’s holdings in the once-bankrupt American automaker.

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The specific price, as well as the number of shares to be auctioned off, have yet to be set.  JPMorgan will serve as the investment banker putting together the Initial Public Offering, which will see Chrysler traded publicly for the first time since it entered a “merger of equals” with Germany’s Daimler-Benz in 1998.

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Court May Decide Value of Chrysler Stock

Ruling next month could force a Chrysler IPO.

by on Feb.12, 2013

Fiat/Chrysler CEO Sergio Marchionne wants to wrap things up with UAW's VEBA as soon as possible.

With Fiat and the United Auto Workers Union unable to come to a compromise on the price of Chrysler stock, it’s going to be up to a judge to decide – a verdict that could be worth $100s of millions.

But the move could end an impasse that has prevented the Italian maker from moving ahead with its long-term goal of buying up more of its U.S. alliance partner. The court’s eventual ruling could also determine what happens if an when Chrysler stages a long-discussed initial public stock offering, or IPO.

Fiat is apparently reviewing financing options with banks to strengthen its balance sheet in preparation to buy out the minority stake in Chrysler Group LLC now held by the UAW’s  Voluntary Employee Benefit Trust or VEBA.

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Sergio Marchionne, Fiat and Chrysler chief executive officer, has held talks with banks to help pay for at least some of the 41.5% now controlled by the trust, which is responsible for the medical bills of Chrysler retirees. A final deal may take months, however, because Fiat and the trust disagree over the value of the shares.

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UAW Wants Chrysler to Sell Stock on Open Market

The union may force Chrysler into an IPO.

by on Jan.10, 2013

Chrysler CEO Sergio Marchionne shown here during an appearance with UAW President Bob King.

The trust fund that pays medical bills for Chrysler’s unionized retirees wants the automaker to put a value on its share by selling a relatively small block of Chrysler stock.

While General Motors, which also went through bankruptcy and a subsequent U.S. government bailout, took itself public in November 2010, Chrysler has so far avoided a long-discussed IPO.

High and Dry!

The United Auto Workers Union Retiree Medical Benefits Trust – often referred to as a VEBA — now owns 41.5% of Chrysler shares. It is asking Chrysler to start the process for an initial public stock offering. The trust wants the company to sell 16.6% of the stock owned by the trust so it can put a value on the shares.

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UAW Demands Extra $200 mil for Chrysler Shares

May scuttle Fiat plans to take over all Chrysler stock.

by on Nov.14, 2012

Fiat CEO Marchionne's bid for additional Chrysler shares has been rebuffed by the UAW.

It could turn out to be a lot more costly for Fiat to acquire a chunk of Chrysler stock now held by the United Auto Workers Union’s health care trust – possibly more than the Italian maker can afford as it struggles to fix its debt-ridden European operations.

Fiat has been steadily expanding its stake in Chrysler in the wake of the U.S. maker’s 2011 bankruptcy and now owns nearly two-thirds of Chrysler stock – or will if it can complete the acquisition of a 3.3% stake it wants to purchase from the UAW. But the union is arguing that the stock is worth $342 million, not the more modest $139.7 million that Fiat has proposed.

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Both sides have taken the case to court and will wait to see which figure is deemed accurate. But the decision could have a bigger, long-term impact as Fiat eventually wants to buy the entire 41.5% stake the UAW received after Chrysler’s bankruptcy.

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Chrysler Stock Offering on Indefinite Hold

“It’s not imminent,” says Marchionne.

by on Mar.07, 2012

The long-awaited Chrysler IPO isn't likely to happen anytime soon, cautions CEO Sergio Marchionne.

Analysts and potential investors who’ve been waiting for a Chrysler stock offering are going to have to keep waiting – possible for quite some time, the maker’s CEO is cautioning.

After Italian automaker Fiat effectively took control of the U.S. maker following its 2009 bankruptcy, Sergio Marchionne signaled he would stage an Initial Public Offering in relatively short order.  The IPO has since been pushed back repeatedly by Marchionne – CEO of both Fiat and Chrysler.

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In a Detroit radio interview, the Canadian-educated executive this week said he will not authorize the stock offering until the time is right.  In fact, he told an Italian newspaper last month, that Chrysler just might skip the IPO entirely.

“It’s not imminent,” Marchionne told Detroit talk station WJR when asked about when Chrysler might take itself public again.

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Will Chrysler Skip its IPO?

Fiat buying last government shares, eyes more.

by on Jun.03, 2011

Chrysler CEO Sergio Marchionne with UAW President Bob King.

Fiat will purchase the U.S. Treasury’s remaining 6.6% stake in Chrysler for $560 million, and will now have the option to purchase the shares held by the United Autoworkers Union.

With the Italians set to acquire yet another 5% as it meets the third hurdle set by the 2009 federal bailout of Chrysler, and CEO Sergio Marchionne now hoping to buy the small stake held by the Canadian government, Fiat could wind up with 76% or more of the stock in Chrysler.

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That has many analysts wondering whether Chrysler will skip the long-discussed return to public trading despite comments made by CEO Marchionne , last month, following the payoff of the U.S. maker’s bailout loans.

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