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Michigan Chrysler Dealers Hear IPO Not Coming this Year; Chrysler Group Not Ready
Although Chrysler Group has been thinking about offering an IPO this year, it seems the company has decided against it as Michigan Chrysler dealers have heard the newest announcement by Chrysler’s CEO.
[Rewind: Michigan Chrysler Dealers See Chrysler Repay $7.6 Billion; Fiat Ownership Increase to 46 Percent]
CEO of Fiat and Chrysler, Sergio Marchionne, announced on June 3 that Chrysler Group will be holding off the idea of an initial public offering for a longer period of time.
“We need an additional track record of performance and probably a better equity market than I’m seeing today,” Marchionne said to reporters. Marchionne stated there would be “no benefit” to offering an IPO this year.
Michigan Chrysler dealers have heard that Marchionne is pushing the company to reach 32 percent global sales, which is 2 million vehicles, this year. This would mean an annual profit of $200 million to $500 million for the company. As of the first-quarter of 2011, Chrysler posted a net profit of $116 million and watched its global sales increase by 18 percent.
Also announced recently was a deal between the U.S. Treasury and Fiat. The Italian automaker has stated it will pay $500 million to get the remaining six percent of the U.S. government’s stake in Chrysler. Another $60 million will be paid to the Treasury to acquire the government’s rights to buy the United Auto Workers retiree health-care trust fund’s stake in Chrysler. This second amount of money will include a payment of $15 million to the Canadian government, who still has 1.7 percent stake in Chrysler.
As of right now, Michigan Chrysler dealers know that Fiat currently has 46 percent ownership in Chrysler, but with the new agreement, Fiat would hold 52 percent of Chrysler.
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