Tuesday, July 31st, Sergio Marchionne, Chrysler’s Chief Executive, announced that an IPO of company’s stock will not take place this year.
“This is not a 2012 event,” Marchionne said on a conference call on Chrysler’s second quarter earnings. “We obviously have ongoing discussion with VEBA about a possible IPO for Chrysler in 2013.”
The announcement came after Marchionne told WJR host Paul W. Smith at the Geneva Motor Show in March that an IPO may happen sooner than expected. Chrysler is 58.5% owned by Fiat, which continues to struggle with the debt crisis in Europe. This has lead to a decrease in new car sales and in 2011 profits for both companies came from Chrysler. An initial public offering could have helped Fiat to raise the necessary money by selling some of its stake.
“We have now created a corporate governance system that’s effectively capable of handling a public U.S. listed company,” said Marchionne in March.
But after Marchionne announced in March that an IPO is about to take place, then at the beginning of July said Fiat plans to exercise a call option to raise its stake in Chrysler, now he declared that in fact an IPO won’t take place this year at all.