Auto union calls on Chrysler to go public
An auto union pension fund has moved to push Chrysler to go public so that the fund can sell its shares in the automaker on the open market, Chrysler said Wednesday.
The number three US automaker said the UAW Retiree Medical Benefits Trust, which holds 16.6 percent of Chrysler shares, submitted a “registration demand” calling on Chrysler to register its shares under the US Securities Act.
The registration demand would force Chrysler to apply to list its shares on the stock market, opening the way for the trust to seek a market price for its holdings.
The move came days after Chrysler controlling shareholder Fiat said it wanted to exercise an option to obtain more shares in the automaker from the trust, which is controlled by the United Autoworkers union.
Fiat, which took control of Chrysler in June 2009 after the US government bailout had stabilized the company, aims to boost its shareholding by 3.3 percent to more than 65 percent through the purchase, priced at $198 million.
The move suggested that the trust also known as VEBA, was not happy with the pricing of the option, one in a series of options Fiat has to raise its stake over time.
Chrysler said in a statement that it would “comply with its obligations under the shareholders agreement and its operating agreement,” pacts mapped in 2009 to protect various interests while allowing the company to get back on its feet under Fiat’s control after bankruptcy reorganization.
However, it added, “There can be no assurance that a registration statement will be filed with the Securities and Exchange Commission, or that if filed, that any such offering will be made or as to the timing of any offering that is made.”