Fiat may delay listing until Chrysler bounces back
Fiat may delay listing until Chrysler bounces back
09:20, March 12, 2010 
Email | Print | Subscribe | Comments | Forum 
Fiat SpA, the Italian carmaker that helped Chrysler Group LLC emerge from bankruptcy, may wait to turn around the US business before deciding on a share sale or spinoff for its automotive division.
The Italian company's stock has risen 19 percent this month on speculation that Chief Executive Officer Sergio Marchionne may carve out Fiat's biggest unit as a new company. Fiat executives have so far sent mixed signals about whether an initial public offering of the division will take place.
A separation of the auto manufacturing operations, which generated 56 percent of Fiat's revenue last year, would give Marchionne an entity to facilitate future alliances, and a share sale would generate cash for international expansion.
The maker of Puntos and Ferraris must show progress at Chrysler, of which it owns 20 percent, before convincing investors to buy shares in the unit, said Royal Bank of Scotland analyst Jose Asumendi.
Marchionne plans to detail on April 21 in Turin, Italy, how Chrysler, which he also runs, will improve Fiat's profitability through shared sales efforts and technology. The CEO is trying to shore up both companies as government incentives to buy new cars end in Europe and Chrysler's US market share lags a 10.5 percent target for 2010.
Chrysler is "in a year of hibernation" and talk of a separate Fiat Auto is "premature", Kristina Church, an analyst at Barclays Capital, wrote in a March 8 note. Barclays upgraded Fiat to "equal weight" from "underweight" in part because the shares may benefit from the speculation.
Source:China Daily
The Italian company's stock has risen 19 percent this month on speculation that Chief Executive Officer Sergio Marchionne may carve out Fiat's biggest unit as a new company. Fiat executives have so far sent mixed signals about whether an initial public offering of the division will take place.
A separation of the auto manufacturing operations, which generated 56 percent of Fiat's revenue last year, would give Marchionne an entity to facilitate future alliances, and a share sale would generate cash for international expansion.
The maker of Puntos and Ferraris must show progress at Chrysler, of which it owns 20 percent, before convincing investors to buy shares in the unit, said Royal Bank of Scotland analyst Jose Asumendi.
Marchionne plans to detail on April 21 in Turin, Italy, how Chrysler, which he also runs, will improve Fiat's profitability through shared sales efforts and technology. The CEO is trying to shore up both companies as government incentives to buy new cars end in Europe and Chrysler's US market share lags a 10.5 percent target for 2010.
Chrysler is "in a year of hibernation" and talk of a separate Fiat Auto is "premature", Kristina Church, an analyst at Barclays Capital, wrote in a March 8 note. Barclays upgraded Fiat to "equal weight" from "underweight" in part because the shares may benefit from the speculation.
Source:China Daily
Related Reading
Special Coverage
Major headlines
Editor's Pick
Most Popular
Hot Forum Dicussion
