Fiat board authorizes $5.4B bond sale to refinance debt, approves Chrysler merger
MILAN (Bloomberg) -- Fiat S.p.A.'s board authorized the carmaker to raise as much as $5.4 billion (4 billion euros) by issuing new bonds, giving the company flexibility to refinance debt as it implements its merger with Chrysler.
The approval runs until the end of 2015 and gives Fiat the ability to issue one or more bonds, the company said Sunday in a statement.
Fiat's board also formally signed off on the merger of the Italian and U.S. carmakers into Fiat Chrysler Automobiles NV.
"Such issuances are designed to manage the consolidated debt of the group especially in view of some of the older bond issuances coming due between now and the end of 2015," Fiat said in the statement.
Fiat bought full control of Chrysler in January, and the merger is part of Marchionne's decade-long effort to turn the Turin-based company into a carmaker big enough to challenge General Motors, Volkswagen AG and Toyota Motor Corp.
The Italian manufacturer had 10 billion euros of net industrial debt at the end of the first quarter.
The bond authorization is in line with sums approved by Fiat's board in past years. CEO Sergio Marchionne on June 13 reaffirmed the company's 2014 profit goals as growth at its Maserati luxury unit makes up for weakness in Brazil, its second-biggest market.
Fiat reiterated a plan to move its primary listing to the New York Stock Exchange after shareholders meet to approve the combination in the third quarter, according to a statement from the company.
Fiat did not disclose a date for the special shareholders meeting.
The merger with Chrysler is expected to be completed by year-end.
Reuters contributed to this report.Contact Automotive News