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Chrysler IPO may face delay, Fiat CEO says

Fiat and Chrysler CEO Sergio Marchionne suggested Wednesday that Chrysler may delay its initial public offering depending on the cash needs of the U.S. automaker and the United Auto Workers trust fund.

Marchionne has previously hinted that an IPO could happen by the end of the year.

He said a decision on whether and when to take Chrysler public would depend on how much the automaker itself and the UAW health care trust, which pays health benefits for retirees and holds a 63.5 percent share in Chrysler, need liquidity.

"If those two needs are not there, then the IPO of Chrysler may or may not become relevant," Marchionne told reporters after a Fiat shareholders meeting.

But he added: "It is rational, maybe reasonable, to expect that there will be an IPO. 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."

Fiat SpA, which took over management of Chrysler LCC 21 months ago, increased its stake in the once-bankrupt automaker, Detroit's third largest, to 25 percent this year.

Marchionne confirmed that it expects to raise it to 35 percent by the end of the year. At that point, it could go even further and raise its stake to a majority 51 percent if Chrysler repays loans to the U.S. and Canadian governments. Marchionne is talking to banks about refinancing.

"Our goal remains to achieve a stake of more than 51 percent within the year," Marchionne said. At that point, Chrysler could launch an IPO.

Marchionne said Fiat had other options for increasing its stake beyond 51 percent, including the possibility of acquiring an additional 8 percent stake from the U.S. Treasury, which owns 9.2 percent of Chrysler, while the Canadian government holds another 2.3 percent.

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