* Chrysler filed for IPO last week
* Fitch warns IPO could cause debt downgrade
* Fiat wants to own all of Chrysler, yet to agree on price
L'AQUILA, Italy Oct 3 The process of selling
Chrysler shares on the New York Stock exchange should shed light
on the U.S. carmaker's value, Fiat and Chrysler Chief
Executive Sergio Marchionne said on Thursday as he tries to seal
a deal for the group.
Fiat, with 58.5 percent of Chrysler, wants to own it all. It
has not been able to agree a price with the United Auto Workers
union, which owns the rest via its retirees' healthcare trust.
Chrysler last week filed papers for a flotation of the union
shares. Though the offering could complicate
Fiat-Chrysler ties, Marchionne saw a use from it.
"One of the things I hope is that it will become very clear
exactly what the markets think Chrysler is worth, which is the
only real reference point," Marchionne said to journalists.
"There's a pretty clear process that leads to the IPO, and
it places clear road markers that can be recognised by both
A disagreement over the value of Chrysler has meant the
owner of the stake, the union-affiliated healthcare trust VEBA,
has not accepted Fiat's offer.
Chrysler's IPO filing last week warned the IPO could force
Fiat to re-consider its alliance, causing commentators to note
the reluctance from Fiat towards the offering made it unusual.
Marchionne currently runs the two companies as one, sharing
technology, dealer networks, purchasing and management know how.
Fiat wants to share Chrysler's cash as well.
The Chrysler buyout talks are being closely watched by debt
and equity investors, because Fiat's long-term plan to cut
losses in Europe depends on its ability to easily and cheaply
share technology, cash and dealer networks with Chrysler.
"The alternative scenario of a Chrysler IPO could lead to a
downgrade as it could complicate overall group corporate
governance and management, in particular because of a fragmented
shareholding structure, and lengthen the refinancing process of
Chrysler's debt," said Fitch Ratings in a note on Thursday.
Fiat's talks to buy up the remaining stake in Chrysler are
continuing but have not made any progress, Marchionne added.
"The talks must continue," he told reporters.
It is not clear how far apart the two sides are on price.