Fiat CEO Sergio Marchionne ruled out an increase in capital to buy the rest of Chrysler’s stake.
“There is no need at the moment for a capital increase for the merger with Chrysler,” Marchionne said at a shareholders’ meeting.
Fiat plans to buy the rest of 41.5% in Chrysler and merge the two companies by the end of 2014, in order to get access to the US automaker’s cash flow and gain financial synergies. Marchionne said that the Italian company has enough cash to buy the rest of the stake, without selling new shares to finance a transaction. Fiat is ready to sell some of its assets to control debt if VEBA finally decides to sell its stake in Chrysler.
“If we ever reach a deal with VEBA to buy the remaining stake, we have enough cash for it,” Marchionne said Tuesday. “Fiat may monetize assets to maintain its financing.”
Fiat relies on Chrysler to end losses in Europe, where it lost more than 700 million euro in 2012, which would have been 1.04 billion euro if it wasn’t for the US automaker’s help. According to anonymous sources Fiat tries to convince banks to refinance a 1.95 billion-euro credit line before it purchases Chrysler.