Fiat board approves Chrysler merger and $5.4 billion bond sale

Article by Christian A., on June 20, 2014

The board of Fiat S.p.A. has approved a plan to raise up to $5.4 billion (EUR4 billion) through issuance of new bonds. The approval allows Fiat to issue one or more bonds until the end of next year, which would make it more flexible to refinance debt while implementing a merger with Chrysler.

The Italian carmaker had EUR10 billion of net industrial debt at the end of the first quarter.

The board also formally approved the merger between Fiat and Chrysler to create Fiat Chrysler Automobiles NV. Fiat said in a statement that the bond issuances are designed to manage the group’s consolidated debt in view of older bond issuances due between now and the end of 2015.

Fiat fully acquired Chrysler, paving way to a merger that would create a carmaker with synergy large enough to challenge global carmakers like Toyota Motor Corp., General Motors, and Volkswagen AG. The approval of the bond issue is in line with amounts approved by Fiat's board in last few years.

Fiat Chrysler chief executive Sergio Marchionne recently reaffirmed the carmaker’s 2014 profit goals, prompted by gains at its Maserati luxury unit that allowed it to offset weakness in Brazil.

Fiat also reiterated a plan to transfer its primary listing to the New York Stock Exchange once a shareholders meeting approve the merger in the third quarter, according to a statement.

Topics: fiat, chrysler

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