- 25May
(Reuters) - Italian carmaker Fiat's (FIA.MI) chief executive said on Wednesday postponing the purchase of a stake in Chrysler Group held by the U.S. Treasury would only make any potential deal more expensive.
Fiat exercised an option on Tuesday to acquire a further 16 percent of the Detroit-based carmaker bringing its stake to 46 percent following Chrysler's repayment of $7.6 billion in U.S. and Canadian government loans from its 2009 bailout.Asked about the possibility Fiat may buy the 6.6 percent stake in Chrysler held by the U.S. Treasury, Sergio Marchionne said: "The more we wait, the costlier it becomes."
Marchionne, chief executive at Fiat as well as Chrysler, declined to give further detail.
Ron Bloom, the Obama administration's point man for auto restructuring, has said the government wants to dispose of the common equity stake it still holds in Chrysler "as soon as practical."
Speaking to reporters as he arrived in Turin for the presentation of Fiat's new Lancia Ypsilon model, Marchionne said Fiat would consolidate Chrysler in its financial results from June 1 -- ahead of some analysts' expectations.
Asked about a possible listing of Chrysler, he said the timing of an initial public offering (IPO) depended on plans by the healthcare trust affiliated with the United Auto Workers union, known as the Veba, to cash in its 45.7 percent stake in the U.S. automaker.
"Whether or not to list Chrysler has only a relative value for Fiat," he said. "(An IPO) depends on market conditions and (Veba's) targets, not on us."
Marchionne repeated Fiat would meet a target to bring its stake in Chrysler to 51 percent in the fourth quarter.
To help achieve this figure, the U.S. carmaker is expected to develop a vehicle that gets 40 miles per gallon on a Fiat platform in the last quarter of 2011.
Fiat shares were up 3.0 percent at 7.11 euros at 1046 GMT, outperforming a 0.6 percent rise in Europe's DJ Stoxx Auto index .SXAP.
(Reporting by Gianni Montani; Editing by Mike Nesbit)
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