Newly merged Fiat-Chrysler aims for US listing in October

Fiat-Chrysler aims to list shares in the newly merged carmaker in New York next month, chief executive Sergio Marchionne said, adding that a decision on any capital increase would be made later in October.

He was speaking a day after the merger between Fiat and its US unit Chrysler cleared its last remaining hurdle.

Fiat bought out Chrysler at the start of 2014 and both operate as one firm. Mr Marchionne wants to incorporate the two into Dutch-registered entity Fiat Chrysler Automobiles (FCA), paving the way for the US listing he says is needed to help finance a €48 billion five-year growth plan.

“The most likely date for the listing in the US is October 13th,” he told reporters on the sidelines of a meeting in Rimini. As part of the listing, Fiat will sell shares acquired from investors exiting the company before its merger with Chrysler to raise funds and boost trading liquidity.

“Those are shares that I normally would not have repurchased, so they may be used to create liquidity” rather than add to debt, Mr Marchionne said.

Mr Marchionne is counting on the merger and the listing to help pay for a relaunch of its Alfa Romeo and Maserati brands, export Jeeps globally, and take all three to fast-growing Asian markets, where the group is currently weak.

Cash call

He said the five-year business plan for the world’s number seven auto group presented in May did not envisage a cash call. “But all decision on any capital increase will be taken by the board of FCA at the end of October,” he said. He also confirmed the group’s full-year guidance for 2014, adding the US market was going “incredibly well”.

Targets to grow net profit fivefold and sales by 60 per cent within five years look ambitious, some analysts say, arguing that the company will have to raise capital to achieve them.

Fiat had €18.5 billion in cash at end-June, but almost €32 billion in debt. Its financing costs are high and margins are weakening. Fiat had so far ruled out asset sales and a share issue, but may go for a mandatory convertible bond. – (Reuters/ Bloomberg)