DETROIT Jan 9 The minority owner of Chrysler
Group LLC on Wednesday pushed the U.S. automaker to take the
first step toward becoming a public company again by demanding
that Chrysler register shares with U.S. regulators.
The minority owner, a United Auto Workers union retiree
healthcare trust, demanded that Chrysler register 16.6 percent
of company shares with the U.S. Securities and Exchange
Commission. The trust has the right to make the demand because
of the 2009 agreement that brought Chrysler out of bankruptcy
and left Fiat SpA as part-owner.
The Italian automaker now owns 58.5 percent of Chrysler and
the healthcare trust, a voluntary employee beneficiary
association (VEBA), owns 41.5 percent.
It could take eight months or longer for the registration
process to take place, if it occurs, said Chrysler spokeswoman
The VEBA may withdraw from the registration process at any
time, she said.
Brock Fiduciary, which manages the VEBA's investment in
Chrysler, said through a VEBA spokeswoman that it would not be
making a statement. The VEBA deferred any comment to Brock.
London-based UBS analyst Philippe Houchois said the move by
the VEBA to force Chrysler to register shares is a ploy in a
separate battle over the value of Chrysler shares, and that
there will not be an IPO.
Fiat and the VEBA are fighting over the value of a 3.3
percent share of Chrysler. The same 2009 agreement that allows
the trust to demand that Chrysler register to sell shares to the
public allows Fiat to make periodic purchases of Chrysler shares
from the VEBA.
Last July, Fiat filed for the first 3.3 percent tranche of
VEBA-owned Chrysler shares. The VEBA balked at the price Fiat
offered, $139.7 million, saying it was too low. Fiat in
September filed suit against the VEBA to force the healthcare
trust to sell the shares.
The issue is now being considered by a Delaware court.
"Fiat is trying to buy Chrysler on the cheap," said
Houchois. "VEBA's only pressure it can put on Fiat is to list
the shares in an IPO to get a higher price. It's a recognition
that VEBA's case is weak. I don't think there will be an IPO."