FLORENCE, Italy — Chrysler won’t be offering its stock for sale on the public markets this year.
Italian automaker Fiat SpA, Chrysler’s majority owner, said in a statement Monday that Chrysler’s board has determined an initial public offering is “not practicable” in 2013.
Instead, Chrysler Group LLC will continue work on the offering so it can happen in the first quarter of next year, the statement said.
Bloomberg News reported that the delay happened because Chrysler wasn’t able to resolve a routine tax issue quickly enough to complete the sale this year.
Chrysler needs a letter from the Internal Revenue Service to clarify tax liabilities after the IPO, Bloomberg was told by two people, who asked not to be identified. Chrysler hasn’t obtained that and didn’t want to proceed without it, the two sources said. Bank advisers were considering a valuation of about $10 billion for Chrysler, people with knowledge of the matter said last week.
Spokesmen for Chrysler and Fiat declined to comment on the tax issue.
Fiat owns 58.5 percent of Chrysler’s shares, with the remaining 41.5 percent held by a United Auto Workers union trust fund that pays health-care bills for blue-collar retirees.
But Sergio Marchionne, CEO of both Fiat and Chrysler, has been squabbling with the trust over the price, and so far they haven’t been able to reach agreement. Mr. Marchionne wants to buy the trust’s shares in order to combine the companies.
The IPO would consist of shares now held by the trust. Last month, UBS AG set the value of the trust’s stake at $5.6 billion. Fiat has gone to court seeking a judgment on the price, but the trial date is set for next September.
The pricing process for the IPO might be the stimulus needed for the two sides to reach agreement and avoid the public sale. “I’m not selling anything, and nor do I think we need to do so,” Mr. Marchionne said in October.
Mr. Marchionne can’t spend Chrysler’s cash on Fiat’s operations unless the companies merge. He says he would prefer to settle the dispute without an IPO, but filed the paperwork for the offering in September at the trust’s request.
The Auburn Hills, Mich., automaker earned $464 million last quarter, its ninth-straight profitable quarter. The results boosted Fiat, which earned $260 million in the third quarter. Without Chrysler’s contribution, Fiat would have lost $340 million.
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