Chrysler Files IPO, Speeds Valuation of VEBA Shares

Chrysler Files IPO, Speeds Valuation of VEBA Shares

Chrysler filed for an IPO today in a move that could help Fiat acquire the remaining 41.5 percent stake that it does not currently own. 

That share belongs to the UAW Retiree Medical Benefits Trust (the VEBA Trust). The group and Fiat-Chrysler CEO Sergio Marchionne have been locking horns over the value of VEBA’s stake in Chrysler.

J.P. Morgan will serve as the investment bank and if approved by the U.S. Securities and Exchange Commission, Marchionne and VEBA will watch as the market decides on a valuation. The move by Chrysler serves as a faster way to value the remaining share rather than waiting on a court ruling. As part of Chrysler’s federal bailout, Fiat would be able to buy 3.3 percent tranches of the VEBA shares over time.

There will be $100 million in shares sold according to a regulatory filing by Chrysler, all of which will come from the UAW trust. However, it isn’t clear how many shares will be offered.

This will also be the first time that Chrysler has been publicly traded since 1998 when it merged with Daimler.

Fiat has been increasing its holding in Chrysler since it initially took a 20 percent stake from the U.S. government in 2009. The Italian automaker has since continued to increase its holding and currently owns 58.5 percent.