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Chrysler Estimates Its Value at $4.77 Billion for Executive Pay

Fiat SpA and ChryslerGroup LLC. CEO Sergio Marchionne
Sergio Marchionne, chief executive officer of Fiat SpA and ChryslerGroup LLC. Photographer: Chris Ratcliffe/Bloomberg

March 8 (Bloomberg) -- Chrysler Group LLC, the U.S. automaker preparing for an initial public offering this year, estimated its value at about $4.77 billion at the end of last year for payments it made to executives.

Executives were awarded Chrysler Group units, each equal to 1/600th of a membership interest, valued at about $7.95 as of Dec. 31, up from $1.66 in an earlier calculation, according to a Feb. 25 securities filing. That values the Class A and Class B membership units at about $4,770 each and the whole company at $4.77 billion because Chrysler’s ownership consists of 1 million membership interests.

“The valuation was determined for the purpose of providing a fair value to equity-based compensation for executive officers,” Eileen Wunderlich, a Chrysler spokeswoman, said in an interview yesterday.

Chief Executive Officer Sergio Marchionne has said he wants to take Chrysler public during the second half of this year and that he expects to meet performance requirements this year to raise Fiat SpA’s stake in the automaker to 35 percent.

Citigroup Inc. analysts led by John Lawson in November 2009 placed Chrysler’s equity value at the time at about $8 billion. Adam Jonas, a Morgan Stanley analyst, in a November 2009 report estimated Chrysler’s equity value at about $6 billion.

Chrysler reported a net loss last year of $652 million on $41.9 billion in revenue. The company has said it will make as much as $500 million in net profit this year, its first since emerging from bankruptcy in June 2009.

UAW Stake

At a $4.77 billion valuation for the company, the United Auto Workers retiree health care trust’s 64 percent stake in Chrysler would be valued at about $3.05 billion. The U.S. government’s 9.2 percent stake in the Auburn Hills, Michigan-based automaker is worth $438.8 million.

The U.S. government gave Chrysler $12.5 billion in assistance to keep it going in 2009, according to the Office of the Special Inspector General for the Troubled Asset Relief Program.

The face value of debts to the U.S. and Canadian government are worth $7.53 billion, according to Chrysler’s Feb. 25 U.S. Securities and Exchange Commission filing.

To contact the reporter on this story: Tim Higgins in Southfield, Michigan at thiggins21@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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