Anonymous sources say that Fiat might get three times as much from a Chrysler dividend in 2013 after the US automaker refinanced debt and also changed the funding terms.
Lower restrictions have been placed by the new debt covenants on the size of the dividend the Italian automaker can gain from Chrysler, which is 58.5% controlled by Fiat. This year Fiat might get $936 million due to the changes, an increase from around $300 million on the old terms.
This week Chrysler closed on the $3 billion refinancing it has borrowed back in 2011 to repay loans taken from the Canadian and US governments during its bailout in 2009. The refinancing has offered Fiat and Chrysler CEO Sergio Marchionne to take a further step in the merger of the two automakers into one trans-Atlantic car maker.
This move will also help the Italian automaker, who is currently struggling with its sales in the European market .Today, June 21st, Fiat signed a separate agreement to refinance 2 billion euro of its debt.Chrysler previously said that this refinancing will cut annual interest costs by around $50 million and that ‘certain loan covenants’ have been amended but did not offer further details.