Fiat may launch convertible bond to boost liquidity

Article by Anita Panait, on January 14, 2014

Fiat Group could launch a convertible bond to improve its liquidity following its agreement to acquire the rest of Chrysler Group for $4.35 billion from a UAW retiree healthcare trust, Fiat-Chrysler chief executive Sergio Marchionne told La Repubblica. He also said that once Fiat merges with Chrysler, the Italian carmaker will focus on its European strategy on revamping its Alfa Romeo brand and will keep its production in Italy as it bids to boost its European business and keep jobs, Marchionne told the paper.

According to Marchionne, a mandatory convertible bond could be an "appropriate measure" to fund investments following the agreement that entails Fiat paying $1.75 billion in cash while Chrysler will pay the rest.

Marchionne told the paper Fiat did not need a capital increase to finance the deal, which is expected to be closed on or around Jan. 20. Marchionne, however, did not comment on a potential EUR1.5 billion ($2.04 billion) size for the bond as reported in media reports.

Likewise, Fiat has had its Ba3 rating placed under review by Moody's credit ratings agency for a possible downgrade reflecting the effect of the planned Chrysler takeover on its cash position. According to Moody’s, the takeover will weaken Fiat's liquidity position at a time when the Italian company is still free cash flow negative.

Topics: fiat

If you liked the article, share on:

Comments

Recommended

BMW has revealed that its i brand has partnered with TED in order to launch a worldwide search of unique ideas under the title “NextVisionaries.” This brand has long been...
by - April 28, 2017
Not a few agree that the Volkswagen Polo news a styling overhaul. While this supermini still looks good as it is now, the latest facelift was around three years. With...
by - April 27, 2017
They say that when the going gets tough, the tough get going. That’s what Harvey Payne did with his Chevrolet Bolt. Ever since he bought it, it had been experiencing...
by - April 27, 2017
What defines a coupe? Well, according to the dictionary, “it is a car with a fixed roof and two doors”. Ok, now that it is clear, when does one not...
by - April 27, 2017
Back in 2013 was when the first hot hatch was released, that was the original A45 by Mercedes-AMG, carrying a hand-built 2.0 liter M133 turbo mill. It was then then...
by - April 27, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries