To read a special report on Fiat, Chrysler and Sergio Marchionne, click here: http://link.reuters.com/nyz68r
By Deepa Seetharaman, Soyoung Kim and Lisa Jucca
DETROIT/NEW YORK/TURIN, March 25 (Reuters) - The board of Chrysler Group LLC is mulling options for refinancing the automaker's roughly $7 billion in government loans ahead of an IPO that could deliver "good returns" for potential investors this year, Chrysler's chief financial officer said.
"We need a couple quarters of black ink at the bottom of the P&L to do anything significant as regards (to) equity investors, but there's a lot of interest," Chrysler CFO Richard Palmer said in a March 14 interview with Reuters for a special report published on Friday.
This is due in large part to the credibility and track
record of Chief Executive Sergio Marchionne, who helped save
Fiat SpA
Chrysler is now refinancing loans it received from the United States and Canadian governments as part of its 2009 bailout. Palmer said the automaker is still in discussions with the Department of Energy for low-interest loans, which would help the company refinance its debt.
This is seen as a precursor to the U.S. automaker's initial
public offering planned for the second half of 2011. The
performance of Ford Motor Co
Fiat is looking to gain majority control of Chrysler soon after Chrysler completes its IPO, according to people familiar with Marchionne's thinking.
But Chrysler must repay all of its U.S. government loans before Fiat can exercise this option. Marchionne is keen for Fiat to take majority control of Chrysler as soon as this year.
Marchionne is also laying the groundwork for an eventual merger of Chrysler and Fiat, whose partnership is deepening week by week. The merged company's headquarters would likely move to the United States, people familiar with his plans have said.
He is also mulling an IPO of luxury automaker Ferrari. One source familiar with Marchionne's thinking said he pins the brand's value at 5 billion euros, or about $7 billion. (Editing by Claudia Parsons)