FCA, Peugeot CEOs Want to Boost Cash Reserves Before Merger
With their sales hammered by the coronavirus pandemic, automobile manufacturers Fiat Chrysler and Peugeot’s owner PSA have delayed their shareholder meetings and are ways to ramp up money reserves ahead of their planned merger.
The two automotive makers have turned to their banks to secure much-needed money, and Fiat Chrysler (FCA) is debt guarantees that the Italian authorities approved Monday to help local firms, said a source with data of the matter.
FCA, whose legal headquarters is in the Netherlands, runs a number of factories in Italy and may qualify for the government scheme which provides over 400 billion euros worth of liquidity and bank loans to corporations struck by the pandemic, the source stated, cautioning no resolution had been made.
The crisis triggered by the virus has just about erased demand for brand spanking new vehicles, pushing auto manufacturers to temporarily pause most production.
In late March, FCA secured a three.5 billion euro credit line, with an initial 12-month term that can be extended six months. This added to present credit services worth 7.7 billion euros.
The Italo-American agency, chaired by John Elkann, scion of the Italian Agnelli household, would wish to cut its ordinary dividend if it decides to pursue state aid from Italy.
The emergency decree says companies trying to apply for Italy-backed loans must refrain from approving dividends for a year.