Fiat Chrysler faces conditions on $ 7 billion loan in Italy
ROME – Fiat Chrysler Automobiles will have to file regular reports on its use of a multibillion-euro state-guaranteed loan and could face sanctions if it fails to meet commitments attached to the package, said Thursday the Italian Minister of the Economy.
With demand reduced and factories slowed by coronavirus restrictions, FCA has requested emergency state guarantees on a € 6.3 billion ($ 7.15 billion) loan for its Italian unit . The loan, which will be financed by Intesa Sanpaolo, is should be approved soon.
A government official familiar with the matter told Reuters on Thursday that Italy’s Treasury would allow state guarantees covering 80% of the loan “in the coming days.” The guarantee will be provided by the Italian export credit agency SACE.
The loan is said to be the largest government-backed European funding to a car maker since the start of the coronavirus pandemic. Renault group obtained a 5 billion euro credit facility backed by the French state, but with few conditions.
The loan drew criticism in Italy because FCA working to merge with the PSA group based in France after moving its headquarters to the Netherlands in recent years.
FCA spent $ 5.5 billion in the first quarter, and the company and the PSA Group last month abandoned a plan to pay € 1.1 billion in dividends as part of their 2019 merger deal.
Economy Minister Roberto Gualtieri told a parliamentary committee that approval would depend on a set of conditions such as the payment of essential suppliers for Italian factories or the financing of domestic investments, especially for vehicles. electric.
“There must be a significant impact in terms of jobs, investments and innovation,” said Gualtieri.
He said that once approved, the loan would require the FCA to report regularly on how the money is being used, adding that any penalties could even include paying off the loan in full before maturity.
It is not clear whether Italy will also set conditions on FCA’s € 5.5 billion extraordinary dividend as part of its merger deal with PSA.
Italian politicians questioned the dividend, although the payment may not be incompatible with state aid, as it is not due until 2021 and would be made by Fiat Chrysler Automobiles NV, the parent company of FCA Italy based in the Netherlands.