Fiat CEO Sergio Marchionne announced that the automaker does not need a capital increase.
A newspaper in Italy published a report earlier this month according to which Fiat was having talks with UniCredit, Morgan Stanley, Bank of America and Goldman Sachs regarding the possibility of raising between 1 and 2 billion euro. Although Marchionne immediately denied the report, yesterday, December 20th, he reiterated that Fiat doesn’t need a capital increase.
“No, we don’t need money. We have 10 billion (euro) of liquidity in Fiat and 10 billion in Chrysler,” said Sergio Marchionne.
Marchionne added that Fiat hasn’t started negotiations for the sale of component unit Magneti Marelli, because it isn’t necessary since the automaker doesn’t need money. Earlier this month Marchionne said that, while Fiat has enough cash available, it could raise even more money if necessary by selling assets. He said one of the assets that could be sold is Magneti Marelli, a company that had revenue of €5.8 billion ($7.6 billion) last year.
Fiat is currently undergoing negotiations with an UAW union trust fund for the acquisition of the remaining 41.5 percent of Chrysler shares that the fund owns. The trust fund, which pays medical benefits to retired workers, acquired the shares during Chrysler’s 2009 bankruptcy and bailout.