Yahoo News Fiat to Secure $6.9B Loan From Intensa, Reopens Mexico Plants
Fiat Chrysler Automobiles N.V. FCAU is likely to be handed out 6.3 billion euro ($6.9 billion) in loans from Italy’s biggest retail bank — Intesa Sanpaolo — subject to the car maker securing a state guarantee, which will cover 80% of the amount borrowed.
Fiat’s Italian unit has been reportedly working with Rome and Intesa Sanpaolo for more than month now to obtain this state-backed loan, three-year facility designed to aid the company’s operations in Italy and the whole industry to combat the coronavirus crisis.
The loan’s approval will take effect once Fiat completes the application process with SACE — Italy's export credit agency — through which the state provides its guarantee, and obtains a final authorisation and conditions for the loan from the treasury.
The loan will be part of the bank credit that Italy has made available to companies under an emergency liquidity scheme to help the economy in amid the coronavirus pandemic. Companies must decide to not pay dividends this year in order to qualify for this 400-billion euros bank credit scheme. Notably, Fiat and PSA Group scrapped their plans to pay out 1.1-billion euros in dividends as part of their 2019 merger agreement, earlier this month.
Meanwhile, Fiat reopened its two facilities in the central Mexican city of Toluca today after a gradual restart of its operations, with 40% of personnel in the northern city of Saltillo on May 25. The company had idled its operations in Mexico on Mar 19 due to the coronavirus crisis.
Fiat currently a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apart from Fiat, BMW AG BAMXF has also restarted operations at its plant in the central Mexican state of San Luis Potosi today. Additionally, Ford F is set to gradually restart its Mexican plant in Hermosillo on May 28. General Motors GM began opening production lines at its Mexican plants in Ramos Arizpe in the northern state of Coahuila and the central city of Silao on Thursday. Automakers like Toyota Motor, Nissan Motor and Honda Motor are also aiming to restart operations in Mexico.
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