Reuters (Turin) - Fiat boss Sergio Marchionne said on Wednesday he wanted to raise the Italian carmaker's stake in Chrysler to 51 percent this year, but hinted taking the company public may be pushed into 2012.
Marchionne said he wants Fiat to have majority ownership of Michigan-based Chrysler and for Chrysler to repay $7 billion in U.S. and Canadian government loans before an initial public offering.
In the end, it may be the cash needs of the United Auto Workers retiree health care trust fund, which owns 63.5 percent of the U.S. automaker, and Chrysler itself that determine the timing of the IPO.
"If those two needs are not there, then the IPO of Chrysler may or may not become relevant," Marchionne said, according to the Associated Press.
"It is rational, maybe reasonable, to expect that there will be an IPO," Marchionne told the AP. "It can't be done very quickly. We just filed with the SEC. We're still working our way through the comments. We have to get ready to be a public company again and issuing securities takes time. We should do it properly."
Heretofore, Marchionne has said he expects a Chrysler IPO in the second half of 2011. On Wednesday, he declined to give reporters a timetable for the IPO, saying only it could be done any time after repaying the U.S. government loans and exercising an option to acquire a further 16 percent in Chrysler.
Marchionne, the chief executive of Fiat and Chrysler, addressed reporters after Fiat Group's shareholder meeting.
Fiat took over management control and 20 percent ownership of Chrysler when the U.S. company emerged from bankruptcy in 2009.
Fiat can increase its stake in Chrysler by meeting three milestones set by the U.S. government in bankruptcy. It increased its stake to 25 percent in January when it announced it would build a four-cylinder Fiat engine at a Michigan plant idled by Chrysler.
The second milestone has two parts, one that Chrysler have sales of $1.5 billion outside its home North American market, which the company appears to have met.
Marchionne said Chrysler is close to achieving another requirement in this second milestone, which is that Fiat get agreements with 90 percent of its Latin American dealers to carry Chrysler products.
Reaching this second milestone would allow Fiat to increase its stake to 30 percent.
But the third milestone, which involves production of a new fuel-efficient car capable of reaching 40 miles per gallon fuel economy, is not yet met. Chrysler officials have said production of that car could begin as early as October.
Achieving the third milestone would give Fiat another 5 percent in Chrysler.
FIAT GROUP MEETING
Earlier on Wednesday, Marchionne said he was targeting a higher market share for car sales in Europe in 2011, with products to be launched in the second half of this year.
Fiat makes the lion's share of its car sales in Europe, where auto sales are expected to continue falling.
"For 2011, we expect a general market improvement, with the exception of the European passenger car market ... with declines forecast for Italy and France," Marchionne told Fiat Group's annual shareholder meeting.
"Nevertheless, we expect our market share will increase as a result of new model releases in the second half of this year."
Marchionne also confirmed the targets laid out in Fiat's 2011-2014 strategic plan.
Fiat's share of car sales in Europe stood at 7.5 percent in 2010. The Italian group is launching a new version of the Panda in the latter part of 2011. Its Lancia brand will start the sale of the new Thema and Voyager models.
