Fiat Chrysler in talks over $6.8 billion state-guaranteed loan in Italy - sources
MILAN (Reuters) - Fiat Chrysler is in talks with Intesa Sanpaolo over a 6.3 billion euro ($6.8 billion) loan backed by Italian government to help the automaker weather the coronavirus crisis, two sources close to the matter said on Friday. Fiat Chrysler (FCA) has gradually restarted its operations in Italy since the end of April. The crisis erased demand for new vehicles and pushed manufacturers to halt most production, burning cash
MILAN (Reuters) - Fiat Chrysler
Fiat Chrysler (FCA) has gradually restarted its operations in Italy since the end of April. The crisis erased demand for new vehicles and pushed manufacturers to halt most production, burning cash.
The loan, which is part of emergency liquidity measures the government is making available to Italy's businesses, must be approved by Intesa Sanpaolo's board, the source said.
If approved by the lender, the request will be reviewed by Italy's export credit agency SACE, through which the state provides its guarantee, and then by the Treasury for a final green light, the source added.
A second source said Intesa Sanpaolo would act as lead lender and that the loan to FCA would be issued by a pool of banks. FCA and Intesa aim to promptly set details and quickly submit the deal to SACE, the source added.
FCA, Intesa and SACE declined to comment.
News that FCA was exploring a state-backed loan was first reported by MF daily on Friday.
FCA, which has its legal headquarters in the Netherlands, runs several plants in Italy and may qualify through its local unit for the government scheme, which offers more than 400 billion euros' worth of liquidity and bank loans to companies hit by the pandemic.
Under the scheme, state guarantees cover 80% of loans for companies with annual revenues of 1.5 billion to 5 billion euros and 70% for companies with revenues over 5 billion euros.
One of the sources said FCA was entitled to get 70% guarantees but that it was asking for 80%, taking advantage of a clause in the scheme favouring companies with operations in industries deemed essential.
Companies using Rome's scheme for state guarantees on loans must refrain from approving dividend payments for a year.
FCA and Peugeot owner PSA
However, as part of the tie-up deal, FCA is also due to pay to its shareholders a special dividend of 5.5 billion euros just before the closing of the merger, which the two groups confirmed was expected before the end of the first quarter of next year.
In the first quarter of this year, FCA's industrial free cash flow was a negative 5 billion euros. But FCA said it had available liquidity of 18.6 billion euros as of March 31, including a 6.25 billion revolving credit facility which was fully drawn down in April.
Last month, FCA completed the syndication of a 3.5 billion euro credit facility with banks.
(Reporting by Giulio Piovaccari and Stefano Bernabei, additional reporting by Valentina Za, Cristina Carlevaro; editing by Mark Potter/Hugh Lawson and Grant McCool)
This story has not been edited by Firstpost staff and is generated by auto-feed.
NEW YORK (Reuters) -The price of cryptocurrencies plunged and crypto trading was delayed on Tuesday, a day in which El Salvador ran into snags as the first country to adopt bitcoin as legal tender. Shares of blockchain-related firms also fell as crypto stocks were hit by trading platform outages. But the major focus was on El Salvador, where the government had to temporarily unplug a digital wallet to cope with demand.
By Joseph White and Sanjana Shivdas (Reuters) -The head of Apple Inc's car project, Doug Field, is going to work for Ford Motor Co to lead the automaker's advanced technology and embedded systems efforts, a hiring coup for Ford Chief Executive Jim Farley.