Chrysler raises $1.78 billion in sale of 46 million shares

February 03, 1993|By New York Times News Service

NEW YORK -- In the second-largest stock sale ever, Chrysler Corp. raised $1.78 billion late yesterday, aided by a sharp surge in its stock price over the past year.

Through underwriters led by First Boston Corp., Chrysler sold 46 million shares at $38.75 each, according to sources on Wall Street, who spoke on condition of anonymity.

Signs of strong demand for the new shares were manifest. The issue was 6 million shares larger than Chrysler had estimated when it filed registration documents with the Securities and Exchange Commission on Jan. 11. The selling price was also $2.50 a share higher than the $36.25 target. Chrysler's stock has risen sharply from $12.50 at the beginning of 1992. It closed unchanged yesterday at $38.75.

Because offerings of new stock tend to dilute the value of outstanding shares, they often produce less cash than companies seek.

When General Motors Corp. filed papers for its record sale of 55 million new shares last spring, the stock was trading at $42.875 a share. The stock was sold on May 19 at $39 a share. The offering still raised more than $2 billion.

Sources familiar with the Chrysler offering said investor interest was heightened because of the company's improving financial condition and the success of its new models.

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