Fiat Chrysler in talks for $10.6b credit line from Italian government

Reports suggest Italy will back FCA’s credit line after efforts to raise cash collapse.

Fiat Chrysler Automobiles (FCA) is in talks to secure a €6.3 billion (AU $10.6 billion) credit line backed by the Italian government, Bloomberg reports.

The firm, which has its financial headquarters in London, scrapped its dividend payments to shareholders after a planned AU $14 billion sale of reinsurer PartnerRe, owned by the holding firm of the Agnelli family alongside the controlling share of FCA, collapsed.

The PSA Group, which has agreed a tie-up with FCA to create the world’s fourth largest car-making group, also scrapped its dividend for 2020. The decision allows them to keep just under $1.9 billion for day-to-day operations during the coronavirus crisis, but it seems FCA is now in discussion for a substantial boost from the Italian government.

Almost every car manufacturer has suffered extensive financial setbacks or share price drops during the pandemic, which caused Australia car sales to fall in April by almost 50 per cent, according to Vfacts. Australia is only now easing out of its lockdown measures and manufacturer’s have told AutoDaily that it is expected the market will gradually return to healthier figures.

A primary reason for FCA seeking the merger with PSA was to bolster its European arm, which has struggled over the years with poor sales, low margins on popular cars and underfunded premium brands such as Maserati and Alfa Romeo. The French group’s expertise in the market, along with its superior progress on electrification, is hoped to help FCA recover its success in the region.

Lawrence Allan

Old Saab plant might open its doors again

The new NEVS Sango could be produced in an old Saab facility. A productive future for Saab’s storied factory in Trollhättan, Sweden, will hinge on...

Euro NCAP launches world’s first driver assist tests

Euro NCAP has released results from the world's first driver-assist testing which will have an impact on some local ANCAP results. A new set of...

Leak: 2022 Honda Civic

The eleventh-generation hatchback will be less aggressively styled, losing its angular headlights and spoiler. Honda is developing the eleventh-generation Honda Civic for launch in 2022,...

Related articles