Iacocca to Hit Road to Push Stock Offering

Chrysler Corp. Chairman Lee Iacocca is planning an international tour with other top executives in a bid to persuade investors to pour $650 million into the ailing auto maker, industry analysts said Thursday.

The three-week tour in Europe and the United States will begin Sept. 3 with a meeting at the company’s headquarters in Highland Park, Mich.

Chrysler is calling that meeting the “Big Tuna” because Iacocca plans to press the nation’s 25 largest institutional investors to bite on a $650 million “red-herring” prospectus.

A company’s preliminary offering of new stock is sometimes called a red herring.

Last month, Chrysler announced it was offering 56 million shares to raise cash and support its under-funded pension fund. About 33 million shares, or $390 million, will be sold to investors.

Chrysler spokesman Tom Houston would not comment on the tour, but analysts say Iacocca and other Chrysler executives have been sending out invitations to a select group.

“There have been meetings set up all over,” one analyst said. “Ever since the prospectus came out, we expected Iacocca to make a tour.”

Analysts said Chrysler is keeping a low profile on the upcoming tour because it does not want to appear overconfident or nervous about the success of the stock offering.

“They don’t want to talk about it because there’s nothing they could say,” said Charles Brady, auto analyst with Mabon, Nugent and Co. in New York.

Chrysler said in a filing last month with the Securities and Exchange Commission that it needed additional funds to launch new products next year including the new LH sedans, which experts feel are the key to Chrysler’s survival.

The company also said it plans to spend more than $16.5 billion on equipment, plant and products.