Fiat S.p.A. will be seeking to increase a credit line to as much as $2.14 billion (1.5 billion euros) after raising its share in Chrysler, according to three people who are familiar with the situation but who have requested anonymity due to the confidentiality of the matter.
The company will be in talks with banks after it completes the purchase of an additional 16 percent Chrysler share for $1.27 billion, the insiders revealed.
Sergio Marchionne, CEO of both Chrysler and Fiat, will be gaining control of the American vehicle manufacturing company two years quicker than expected.
Specifically, he aims to increase the stake of Fiat to 46 percent in the second quarter from 30 percent after completing transactions in order to repay the $7.5 billion Canadian and U.S. government loans of Chrysler.
The loan will replace a 1 billion-euro revolving credit line that expires in February next year. Under the new facility, Fiat intends to work with UniCredit S.p.A., which arranged the existing loan, Intesa Sanpaolo S.p.A., and Credit Agricole SA.
The company may also introduce new lenders, according to two of the three insider sources. Fiat is expecting to complete the agreement by July, but a transaction could take longer depending on the conditions of the market, one of the three insider sources stated.
A Fiat spokesperson declined to make a comment on the financing plan of the company. The company, which had 13.1 billion euros of liquidity at the end of March this year, has been bolstering its finances to prepare to take a majority stake in Chrysler. Last month, Fiat sold 1 billion euros of five-year bonds, which is its first public transaction since 2009.