Chrysler Chief Executive Sergio Marchionne Wednesday said an initial public offering of Chrysler Group LLC shares might not happen this year, citing time constraints.
Mr. Marchionne has repeatedly said he wanted to take Chrysler public in the second half of 2011. It would need to repay U.S. government loans the company received during its bankruptcy in 2009 and raise its liquidity. The loans carry 10 percent interest rates that cost Chrysler more than $1 billion last year, reported The Wall Street Journal.
But the company is still in discussions about securing funding to repay the loans. Chrysler has had an "incredibly good reception" from a potential pool of lenders and arrangers to refinance its loans, Mr. Marchionne said. But he added: "We are looking for solutions."
"We need to get ready," Mr. Marchionne said. "That takes time ... We should do it properly," he said.
Chrysler owes $5.8 billion to the U.S. Treasury and $1.6 billion to Canada's federal and provincial governments. The U.S. government owns 9.2 percent of Chrysler.
Mr. Marchionne, who is also CEO of Fiat SpA, reiterated his expectations of having Fiat raise its stake in Chrysler to 51 percent by the end of the year. Fiat would like to exercise an option to buy an additional 16 percent stake in the U.S. car maker ahead of the IPO. Fiat now owns 25 percent of Chrysler.
Fiat is working toward increasing its stake by 5 percent installments by meeting a series of milestones set by the U.S. government to improve Chrysler.
