Chrysler majority owner Fiat has announced that the US cluster of car brands will not launch a public stock offering this year. In a statement yesterday, Fiat said Chrysler's board has decided an initial public offering would be "not practicable" this year.
Instead, Chrysler Group LLC will keep working towards an IPO in the first quarter of next year. Fiat holds 58.5 per cent of Chrysler's shares, with the rest owned by a United Auto Workers union trust fund. The IPO would consist of the trust's shares.
The CEO of both car groups, Sergio Marchionne, is keen to avoid an IPO and have Fiat buy the trust's shares so the two companies can be fully combined, allowing him to spend Chrysler money on Fiat operations.
"I'm not selling anything and nor do I think we need to do so," Marchionne said in October. However he filed the paperwork for an IPO as he and the trust have been in conflict over the price for a sale of the trust's share to Fiat, with no agreement reached.
Last month, UBS AG set the value of the trust's stake at $US5.6 billion ($A6.1 billion). Fiat has gone to court seeking a judgement on the price, but the trial date is set for next September.
While Fiat stepped in as a perceived 'saviour' to shore up the struggling Chrysler by buying into it two years ago, Chrysler's profits have been propping up Fiat on the balance sheet during 2013 as the Italian carmaker struggles in the European economic slump.
Chrysler earned $US464 million last quarter on US sales of the Ram pickup and Jeep Grand Cherokee, its ninth-straight profitable quarter. The results boosted Fiat, which earned $US260 million in the third quarter. Without Chrysler's contribution, Fiat would have lost $US340 million.