logo
Share SHARE
FONT-SIZE Plus   Neg

Fiat CEO Expects Fiat-Chrysler Merger To Be In 2014: Reports

The merger of Italian carmaker Fiat S.p.A. (FIATY.PK) with Chrysler Group LLC would be in the year of 2014, according to several reports on Sunday, quoted the Chief Executive Officer of Italian carmaker Sergio Marchionne, as saying.

On 9th January 2013, Chrysler Group said it received a "registration demand" from the UAW Retiree Medical Benefits Trust, also known as UAW voluntary employees beneficiary association or VEBA, for the sale of a part of the trusts ownership in Chrysler. The VEBA owns 41.5 percent of Chrysler shares, while Fiat SpA owns the remaining 58.5 percent of Chrysler.

Turin, Italy-based Fiat was entitled to further boost its ownership stake in Chrysler to 75.1 percent from the current 58.5 percent by exercising other call options on VEBA shares. Fiat can buy as much as 3.32 percent of Chrysler from the VEBA every six months between July 1, 2012 and June 30, 2016. However, the total amount Fiat can accumulate is limited to 16.6 percent.

According to a shareholder agreement of June 2009, VEBA requested to register the 16.6 percent stake in Chrysler to be sold through an initial public offering.

VEBA has reportedly maintained that some of its shares are worth twice what Fiat is offering to pay. Meanwhile, Fiat looking to buy the shares directly from VEBA and to repay debt owed to bondholders.

Fiat has already filed plans for the purchase of an additional 6.6 percent stake in Chrysler, with call options scheduled to be exercised in July 2012 and January 2013. However, VEBA and Chrysler are fighting a court case over the disagreement on the pricing of Chrysler shares, and also over VEBA failing to deliver the shares even after the first call option was exercised in July.

Chrysler, which was once part of German automotive company Daimler AG, emerged from Chapter 11 reorganization in June 2009 and was bought by Fiat in a U.S. government-brokered deal.

Fiat took control of Chrysler under the bailout deal and in early January 2012 raised its stake in the U.S. car maker to 58.5 percent in several tranches from the initial 20 percent it initially held. Chrysler's results were consolidated by Fiat Group since June 2011.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Xiaomi Corp., nicknamed the "Apple of China" is planning to launch laptops, a report by Bloomberg said. The Chinese brand has been pausing a direct challenge to major smart phone brands in Asian markets in the recent years. It has planned to win over China, India and Brazil markets those together would account for one third of the worldwide sales. Value-priced fashion apparel and accessories retailer Cato Corp. (CATO) Thursday announced a four percent increase in comparable store sales for August. Sales were for the four week period was up five percent to $67 percent from $63.6 million last year. For the thirty weeks ended August 29, the... Simple, uncluttered, colorful and friendly. That's how Google describes its new logo. The new typeface is sans-serif and without any shadow or embossing, unlike its earlier logos. It has given blue, red, yellow and green to its letters. The "e" is slightly tilted and stylized. On its browser tabs, it has replaced the lower case blue colored "g" with an upper case "G" in four colors.
comments powered by Disqus
RELATED NEWS
Trade FCAU now with 
Follow RTT