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Chrysler hits brakes on speedy IPO

One of the more unusual initial public offerings in recent years has hit the brakes just when it looked like we might actually see shares start trading. Chrysler's board of directors issued a statement saying an IPO will not be practicable this year. The board said it's still working on necessary steps for an IPO in the first quarter of next year.

On Tuesday afternoon, the company also filed papers signaling its intent to seek a listing on the New York Stock Exchange.

The stall is the latest pull by the Chrysler board in the tug-of-war over a potential stock offering of Chrysler shares. It comes amid reports we could see the VEBA Trust put 16 percent of its Chrysler shares up for bid within the first two weeks of December.

(Read more: Fiat: 'Not practicable' to spin off Chrysler by end of 2013)

Keep in mind, the VEBA trust and the Chrysler Board have yet to agree on the value of Chrysler, which is a key component in the process. Bankers and analysts on Wall Street have put the value of Chrysler between $10 billion and $11 billion. That means the VEBA Trust, which still owns 41.5 percent of Chrysler, has a stake valued between $4.1 billion and $4.5 billion.

Sergio Marchionne, chairman and CEO , Chrysler Group LLC, and CEO, Fiat S.p.A.
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Sergio Marchionne, chairman and CEO , Chrysler Group LLC, and CEO, Fiat S.p.A.

Marchionne still pushing for deal

For Chrysler and Fiat CEO Sergio Marchionne, the runup to a potential IPO will be filled with negotiations to see if he can strike a deal to buy out the VEBA Trust. If Marchionne can swing a deal at a price that pleases the VEBA Trust, it will finally get Fiat full control of Chrysler and access to Chrysler's cash. That's the end goal for Marchionne.

(Read more: Chrysler IPO: What investors need to know)

For the VEBA Trust it's all about getting the best price possible for its stake in the automaker. Remember, the VEBA Trust will use the proceeds of an IPO or sale to Fiat to pay for the health-care expenses of retired Chrysler UAW members.

—By CNBC's Phil LeBeau. Follow him on Twitter @LeBeauCarNews.

Questions? Comments? BehindTheWheel@cnbc.com.

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