The concern regarding the impact of the European crisis on Fiat’s bottom line made two banks downgrade shares in the company.
Tuesday, discount prostate November 20th, Fiat’s shares dropped by 5.9% and two European banks downgraded the automaker’s stock. UBS AG reduced Fiat’s stock from a “buy” rating to “neutral” and Deutsche Bank cut the Italian automaker’s shares from “hold” to “sell” due to concerns that Fiat will need to raise a lot of money to be able to fund CEO Sergio Marchionne’s plans.
Marchionne declared earlier this month that he plans to buy the rest of the US automaker, Chrysler, by 2015, and that Fiat will need to raise between 1.6 billion and 2.9 billion euro. According to Bloomberg, Marchionne will do his best to increase Fiat’s stake in Chrysler to be able to access the US automaker’s cash flow.
Last week Marchionne said that Fiat doesn’t need to access Chrysler’s cash to heal its European business. Fiat currently owns 58.5% of Chrysler and it plans to acquire the entire company’s stake. Unfortunately this won’t be able until 2014 or 2015 as Fiat announced it will now focus on the Italian automaker’s finance and profit in the loss-making Europe, postponing the plan to merge with the US automaker.