Fiat SpA – the carmaker that took over entirely over Chrysler Group – has decided to aid the implementation of the merger by issuing new bonds in a bid to gain as much as 4 billion euros ($5.4 billion) in cash.
The board of directors gave the automaker its permission to refinance its debt through the new issue, which runs until the end of 2015, paving the way for one or more bonds, according to a statement coming from the Turin, Italy-based company.
The board also formally signed on the merger that transforms Fiat SpA and its wholly owned subsidiary Fiat Group LLC into the new entity – Fiat Chrysler Automobiles NV.
“Such issuances are designed to manage the consolidated debt of the group especially in view of some of the older bond issuances coming due between now and the end of 2015,” Fiat said in the statement.
Chief Executive Officer Sergio Marchionne managed to achieve its full control take over of Chrysler after a tumultuous period – with the minority shareholder – a retirement trust belonging to the UAW union – was willing to put Chrysler through an IPO (initial public offering). The deal was signed off in January and allows the new carmaker to become the world’s seventh largest.
Sergio Marchionne’s ultimate goal is to make the Fiat Chrysler Automobiles strong enough to challenge the top players of the industry – Toyota, Volkswagen or General Motors.