Chrysler IPO easiest option today: Fiat CEO

A public share offering for Chrysler is the easiest option as of today, the chief executive of Fiat and Chrysler said, as the two companies draw operationally closer.

Sergio Marchionne, the CEO of both the US and the Italian carmaker, has said an IPO for Chrysler was possible for the second half of 2011, but has suggested this might not happen before 2012. "I think the IPO is the easiest option," Marchionne said on Tuesday at an event marking the launch of Fiat's production of the Freemont mid-sized sports utility vehicle. "We cannot put the Fiat rating at risk (for Chrysler)," he said. The Italian carmaker is poised to increase its stake in Chrysler to 52 percent, raising speculation Marchionne may be aiming to take full control of Chrysler. Marchionne also said he was not in talks with VEBA union trust fund to buy its stake in the Detroit-based carmaker. Fiat has an option to buy 40% of the VEBA stake starting in June 2012. VEBA owns 45.7% of Chrysler. The VEBA fund is looking at various options to cash in on its holding, including selling to an investor which could be Fiat or selling in a public share offering, sources familiar with its strategy told Reuters last month. Marchionne also said no time frame had been set to buy the Canadian government's 1.7% stake in Chrysler, for which Fiat has offered USD 125 million. "It's very difficult to tell. It's not my decision. The offer has been made," Marchionne said. Asked about sales of the Fiat 500 small car in the United States, Marchionne said he expected to meet sales targets despite a shortage in distribution. He said Fiat had only about 70 dealers set up to sell the car, short of a launch target of 160. The number likely will rise to 100 by the end of the summer. "We're short of getting distribution," he said. "I think overall we'll hit the numbers. I think turnover will be fine." The Freemont is rebranded from Chrysler's Dodge Journey and key to Marchionne's plan to cut development costs and boost factories' capacity use.