Fiat Chrysler to issue $2.5 billion mandatory convertible, shares

MILAN (Reuters) - Fiat Chrysler Automobiles said on Wednesday it would issue a mandatory convertible bond for $2.5 billion (1.55 billion pounds) and place up to 100 million of its shares to shore up funding for its 48-billion euros (37.86 billion pounds) investment plan. Investors participating in the mandatory convertible offering will be entitled to receive shares in luxury carmaker Ferrari as part of a spin-off plan announced earlier on Wednesday. The market has long said FCA, with a net debt of 11.4 billion euros at the end of September, needed to raise capital to strengthen its balance sheet, especially as it is still battling with losses in Europe and a weakening outlook for Latin America. The world's seventh-largest carmaker, which moved its primary listing to New York on Oct. 13, said the share issue would include treasury shares and stock that will be issued to offset a buyback of shares from exiting investors as part of the merger into Fiat Chrysler Automobiles. The group added in a separate statement it would repay ahead of maturity Chrysler bonds due in 2019 and 2012. (Reporting by Agnieszka Flak, editing by Danilo Masoni)