Fiat mulls EUR1.5-bil mandatory convertible bonds to cut debt

Article by Anita Panait, on March 6, 2014

Fiat mulls selling about EUR1.5 billion ($2.05 billion) in mandatory convertible bonds to reduce debt after its merger with Chrysler Group, two sources  privy with the matter told Bloomberg. Fiat is holding talks with banks about issuing a bond that would convert into shares of Fiat Chrysler Automobiles, the resulting company of the merger.

The talks are still at a preliminary phase, with Fiat targeting to decide on whether to proceed in the first half of 2014, the people said. Fiat is also reviewing other options to bolster its balance sheet. 

Fiat won't pay a dividend in order to maintain liquidity following a deal to fully acquire Chrysler at $4.35 billion. It is now deciding how to boost financing without having to resort to a capital increase, chief executive Sergio Marchionne said in January. Fiat’s options include issuing mandatory convertible bonds and selling assets, he said.

"The most likely option is a mandatory convertible; that has the advantage of being issued at a premium to the share price," Massimo Vecchio, an analyst with Mediobanca, wrote in a note to clients.

"However, the group has several funding options," including selling a holding in Ferrari or Maserati, he said. Fiat’s shares have grown 84 percent in 2013, valuing the Italian carmaker at EUR9.48 billion.

Marchionne is aiming to transform the carmakers into a global manufacturer large enough to rival General Motors Co. and Volkswagen in worldwide sales. [source: Bloomberg]

Topics: fiat

If you liked the article, share on:

Pin It

Comments

Recommended

Top Gear has revealed that for its “Stars in a Reasonably Fast Car” segment, it will now be using a slightly enhanced Toyota GT86, which in the U.S. market is...
by - March 24, 2017
Porsche is laying aside any plans of pushing another hybrid hypercar into their line-up -- at least not at this time. Oliver Blume, Porsche Global Chief confirmed in a recent...
by - March 24, 2017
Since 1993, Lexus has produced 4 generations of the Lexus GS, with the GS F amongst its newest member of the family. Unfortunately, rumors are also heating up that the...
by - March 24, 2017
In a leaked image following a presentation held in China, we learned that Czech automobile manufacturer Skoda will soon unveil 2 more new SUVs in China, resulting in a four-model...
by - March 24, 2017
McLaren is said to be designing the next generation of Sports Series, which could include a V6 hybrid among its powertrain options. It was earlier reported that the British automaker...
by - March 24, 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