Fiat SpA (BIT:F) looking for $2.5 billion funding for Chrysler buyout

by Dagmark Garcia | Monday, Apr 1, 2013 | 1340 views

Northern, WI 04/01/2013 (usastockreport) – Fiat SpA (BIT:F) ( Current: $4.15, Down by 1.00%) has set the stage to buy-out the 41.5 percent stake in Chrysler Group LLC that it does not yet own. The car manufacturer is looking for funding from banks and will need a credit line of $2.5 billion to help it have cash for Chrysler as well as provide it with some liquidity. The Chief Executive Officer of both the companies, Sergio Marchionne is looking for refinance options as early as next month as the company’s revolving credit line will be expiring next year. Fiat has not made any official comment on this as it does not discuss its financial strategies but people in the know have provided this information.

Retiree fund-owned
The remaining stake is owned by United Auto Workers medical benefits trust which is run for its retirees. Marchionne wants to action an outright buy and merge the two regional car manufacturers to create a single global one. He said that by June or July it will be clear as to what the exact payment amount will be as the court ruling will be passed by then. Though the company had exercised its options to buy more stake the price dispute proved to be a hurdle in the deal and the fund has not handed over the shares to Fiat SpA (BIT:F).

The Italian car-maker suffered losses of over 700 million euros in 2012 and is hoping that the merger with Chrysler will narrow that gap. Another possibility is that the fund might hold an Initial Public Offering to sell its share of stocks. The valuation process of the UAW holding has been initiated and the company might consider listing it in the U.S exchange. Irrespective of what combination is decided upon, the outcome will be finalized by the end of 2013.

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