Slow rally may delay GM, Chrysler plans to go public

• Source: Xinhua
• [08:33 November 25 2009]
• Comments

Slow recovery in 2010 could hamper cash flow and efforts by General Motors Co. and Chrysler Group LLC to rebound to the point that the companies can go public, according to a forecast released Monday by Fitch Ratings.

The New York-based rating service expected US light-vehicle sales of 11.1 million next year which would be about 8 percent above the estimated 10.3 million units sold this year.

"A muted industry recovery indicates that in Fitch's view, neither General Motors nor Chrysler will be in a position to access the equity markets in 2010," the forecast said.

GM recently said it would like to make a public stock offering late next year while Chrysler has said it does not expect to be ready to issue public shares until 2011 at the earliest.

The report cites uncertainty about the automakers' near-term profitability, business models and access to capital which "will limit investor appetite until there is more clarity on the companies' operating performance and prospects."

The Fitch report estimated that government support of the industry has totaled more than 125 billion dollars. GM has received about 50 billion dollars and Chrysler 15 billion dollars so far.