Sergio Marchionne Meets Italy Industry Minister to Discuss Chrysler Deal image

Fiat-Chrysler CEO Sergio Marchionne will meet Italy’s Industry Minister Flavio Zanonato, Friday, May 31st, to take about the US automaker’s purchase.

Fiat might issue a convertible bond to be able to raise financial resources necessary to buy the rest of 41.5% stake in Chrysler, from VEBA healthcare trust fund, said Il Sole 24 Ore newspaper. VEBA might wait until the US court will rule on a final price for the 3% stake in Chrysler, before closing a deal with Fiat for the rest of the stake.

Sergio Marchionne, Fiat and Chrysler CEO, plans to merge the two automakers and create the seventh largest auto group, also relying on Chrysler’s cash flow to help Fiat make up for the loss in Europe and build economies of scale.

Yesterday, May 28th, Fiat’s shares reached a new peak since August 2011, on rumors that the automaker is the final negotiation phase to purchase Chrysler and at the end of last week Corriere della Sera newspaper said that Fiat will pay around $3 billion for the rest of the stake.

On April 27th, the Wall Street Journal said that Fiat CEO Sergio Marchionne is still in talks with Bank of America, Goldman Sachs, Deutsche Bank and other banks for a potential financing to acquire Chrysler. Last month, anonymous sources said that Fiat might secure financing to purchase the rest of Chrysler in May.

Source: Reuters