According to banking sources, Fiat will sign a refinancing loan of 1.95 billion euro with nine banks by the end of this month.
The 1.95 billion euro loan will help Fiat buy the rest of Chrysler stake it does not own and merge the two automakers. Fiat and Chrysler CEO Sergio Marchionne also plans to reduce the rate on Chrysler’s $2.95 billion term loan. Since 2009 Fiat managed to accumulate 58.5% stake in Chrysler and plans to buy the rest as soon as possible to become a tougher competitor for GM and VW.
“We deem the news positive as the acquisition of Chrysler minorities may materialize soon, ” said Gabriele Gambarova, an analyst at Banca Akros in Milan. “The reshaping of Chrysler debt is important because current conditions prevent Fiat from having access to Chrysler cash.”
According to anonymous sources the two deals might be signed as soon as next week. Among the banks which offered to refinance Fiat are Barclays Plc, UniCredit SpA, Citigroup Inc and Mediobanca SpA. Fiat might pay $4.5 billion to buy the 41.5% stake owned by VEBA, the health-care trust, $1 billion more than the previous estimate made two months ago.