Fiat plans to sell withdrawal shares as part of New York listing
The withdrawal shares will be sold as part of the listing of Fiat Chrysler Automobiles on New York Stock Exchange
Rimini: Fiat SpA will sell shares acquired from investors exiting the company before its merger with Chrysler Group LLC to raise funds and boost trading liquidity.
“Those are shares that I normally would not have repurchased, so they may be used to create liquidity rather than add to debt," chief executive officer Sergio Marchionne told Bloomberg on Saturday at an event in Rimini, Italy.
The withdrawal shares will be sold as part of the listing of Fiat Chrysler Automobiles NV on the New York Stock Exchange (NYSE), which may take place 13 October, he said.
The merged company’s new board will then meet in late October and evaluate its capital structure, including weighing the possibility of issuing new shares.
Fiat’s merger with its US unit will create the world’s seventh-largest auto maker in an effort to better compete with heavyweights like General Motors Co., Volkswagen AG and Toyota Motor Corp.
The project focuses on attracting customers with higher-priced Alfa Romeo sedans, Maserati sports cars and Jeep sport-utility vehicles.
Fiat, based in Turin, Italy, said on Friday that the merger is on track for completion by mid-October as the cost of buying out investors who withdraw before the deal is completed won’t exceed the €500 million($657 million) limit set by the company.
The car maker, which had said that it planned to cancel those shares, will announce the final tally of shares that will be purchased from cash-exit rights by 4 September.
The Italian company’s stock fell to the lowest level this year in early August amid concern that the payments would total more than the allotted figure and put the timing of the transaction at risk.
The manufacturer is targeting a profit increase of as much as 18% this year, helped by an expansion of its luxury division, which includes the Maserati and Ferrari brands.
Earnings before interest and taxes, and excluding one-time items, will range from €3.6 billion to €4 billion in 2014, compared with €3.39 billion last year, Fiat reiterated in late July. Marchionne said that those targets were still valid to the best of his knowledge. Bloomberg
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