Back in May, we heard about FCA considering a government-backed loan for Italy worth as much as 6.3 billion euros ($7.1 billion), and now it seems that the deal is close to going down.
The Italian government is ready to approve the credit facility, which would then become Europe’s biggest government-backed financing deal for an automaker since the start of the novel coronavirus pandemic, reports Autonews Europe.
However, this deal still needs an ‘OK’ from Finance Minister Roberto Gualtieri, which could still happen this week, after his accounting offices already approved the terms, said people familiar with the matter. The next step will then be for the loan to get green-lit by Italy’s state auditor.
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Italian banking group Intesa Sanpaulo S.p.A already gave the go-ahead for the loan last month, with credit insurer Sace S.p.A offering to guarantee 80 percent of the amount.
FCA already said that it plans to use the credit facility exclusively for its Italian activities, such as to pay workers’ salaries and its suppliers, as well as for planned investments at domestic facilities.
The country’s automotive supply chain holds 200,000 small and medium-sized companies, generating more than 100 billion euros in annual revenue.
“Car sales in Italy will plunge this year to 1.2 million compared to 2.1 million in 2019,” said Dario Duse, a managing director at consulting firm Alix Partners – who predicts that the industry may take more than five years to return to pre-pandemic levels in terms of sales.
