Fiat Chrysler said it eliminated covenants for two term loans of its US subsidiary and it now had full access to the unit’s cash flow.
The world’s seventh-largest carmaker is on a turnaround path to the end of which Fiat Chrysler aims to double its profit and erase its operating debt by 2018. On the way to glory, the company plans to focus on its high-selling Jeep brand, but also to bring back to the game Maserati and Alfa Romeo. Therefore, all the extra cash are more than welcome for the development and expansion of the core products lineup. Fiat completed the buyout of Chrysler in 2014 and created Fiat Chrysler Automobiles, but it did not have full access to its US division’s cash reserves as until now it was limited by a cap on dividends and debt covenants.
The company announced this week that its subsidiary FCA US LLC has entered into amendments to its Term Loan maturing in 2017 and its Term Loan maturing in 201, to eliminate covenants restricting the payment of dividends. “The amendments represent the final step toward allowing the free flow of capital among members of the FCA Group, as previously announced, and enabling access to the second 2.5 billion euros ($2.8 billion) tranche of Fiat Chrysler Automobiles’ 5 billion euros syndicated revolving credit facility,” the company said in a statement. After six year of sales increases, the Italian-American automaker ended 2015 with 11.6 billion dollars of cash to carry on its growth strategy.