Fiat Chrysler Automobiles and Italian banking group Intesa Sanpaulo S.p.A. are negotiating a state-backed credit line of as much as €6.3 billion ($6.8 billion), The Detroit News reports.
FCA revealed in a statement that Italy’s top lender would lead a three-year loan facility to help finance the car manufacturer’s business in Italy. Sace S.p.A. will guarantee 80 per cent of the amount in a mechanism that would need approval by the country’s Finance Ministry.
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FCA would be required to use the funds for operations in Italy which would be “intended to provide further support to some 10,000 small and medium enterprises in the automotive supply chain in Italy following the reopening of the company’s Italian plants beginning at the end of April.”
The carmaker said itself and its suppliers are pivotal to the restart of the Italian industry and pointed out that the automotive sector if equal to about 6.2 per cent of Italian gross domestic product and 7 per cent of the nation’s manufacturing employment.
FCA announced a $1.9 billion loss in the first quarter of the year and revealed in late April that it had already drawn down billions of dollars in credit. Last week, FCA and forthcoming merger partner PSA Group said they would not issue expected dividend distributions from both companies due to the coronavirus pandemic.
In separate FCA news, it was revealed last week that antitrust regulators in the European Union will make a determination on June 17th on whether or not to approve the $50 billion merger between FCA and PSA.
