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]

If you liked the article, share on:

Topics: fiat

Comments

Recommended

Just a couple of days ago, BMW published an image of their long term plan for the next couple of years, and this includes electrifying most of their cars. We...
by - December 13, 2017
McLaren’s special department, the McLaren Special Operations (MSO) team, has created a unique colour that is a tribute to the home of the automaker’s founder, Bruce McLaren, in Surrey, England....
by - December 13, 2017
Autonomous cars are now becoming more of a reality as carmakers and their partners continue the development of self-driving technologies. Connected vehicles now actually exist but auto companies see that...
by - December 13, 2017
There may be several owners of the Ford Focus RS who have experienced seeing white smoke coming out from the exhaust of their performance-laden hatchback. Now, the American carmaker has...
by - December 13, 2017
Porsche has been making a killing in terms of sales with its two luxury sports utility vehicles, the compact Macan and the midsize Cayenne. While Porsche is known for its...
by - December 13, 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