Fiat CEO says no rush to buy VEBA's Chrysler stake
TURIN, Italy (Reuters) - Fiat SpA is in no rush to buy the remainder of Chrysler from a United Auto Workers trust fund and cannot be forced to launch a Chrysler IPO until 2013, Fiat Chief Executive Sergio Marchionne said.
The Italian carmaker has increased its stake in Chrysler to 52 percent, raising speculation Marchionne may be aiming to take full control of Chrysler -- of which he is also chief executive.
The VEBA trust fund holds a 45.7 percent stake in the Detroit-based carmaker.
"We are not obliged to buy (the VEBA stake)," Marchionne told reporters on Monday.
"We have the right to buy a portion of their interest. We can start discussions in the second half of 2012. And they can't force the company to launch an IPO before 2013, so we have a lot of headroom going forward," Marchionne said.
The VEBA fund is not planning a quick exit from Chrysler and is looking at various options to cash in on its holding, sources familiar with its strategy told Reuters last week.
These include selling to an investor which could be Fiat or selling in a public share offering, the sources said.
Fiat, which has managed Chrysler since a 2009 bailout, took its stake in the number three U.S. carmaker past the 50 percent mark last week after the U.S. Treasury agreed to sell its remaining 6 percent holding for $500 million.
Fiat also agreed to pay $75 million for the right to buy all of VEBA's stake for a capped "threshold amount" -- which was set at $4.25 billion in 2009, increasing at a 9 percent annual interest rate, so analysts say it has now risen to around $5 billion. Continued...