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:

Comments

Recommended

The Swedish moose test is known to have victimized many in the past, including the Toyota Hilux that massively failed. So knowing that many cars from trusted and leading automakers...
by - June 27, 2017
All-new BMW X3 (G01) just made its debut! The updated model has a familiar design, and slightly increased dimensions compared to its successful predecessors. For more cabin space, the wheelbase...
by - June 27, 2017
Polestar is notably known to be Volvo's internal performance specialists, and around last year Polestar revealed to the public that it will utilize electrification to further advance the power of...
by - June 26, 2017
Earlier this month, Porsche introduced to us the 911 Turbo S Exclusive Series. The car wore a Golden Yellow Metallic paint. The same time it was launched, the company said...
by - June 26, 2017
Last month, the Lamborghini Centenario made its way to the Transformers: The Last Knight premiere where it got the attention of many. Following that event, three Lamborghini Centenario coupes landed...
by - June 26, 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