Fiat Chrysler seeks $ 6.8 billion state-guaranteed loan in Italy

MILAN (Reuters) – Italian Prime Minister Giuseppe Conte said on Saturday that Fiat Chrysler had the right to apply for Italian state-guaranteed loans because the automaker employs thousands of people in the country, even though its legal base is located abroad.

The Italian-American group confirmed on Saturday that its Italian unit was working with Rome to secure state guarantees on a € 6.3 billion ($ 6.8 billion) loan facility to help the auto industry Italian, made up of around 10,000 small and medium-sized enterprises.

The coronavirus epidemic, which has hit Italy particularly hard, has dampened demand for new vehicles and forced automakers to shut down most production, burning money.

Fiat Chrysler Automobiles said in a statement that discussions were underway with lender Intesa Sanpaolo for a three-year credit facility exclusively dedicated to the group’s activities in Italy.

When asked if FCA, which is headquartered in the Netherlands, could get a loan guaranteed by the Italian government, Conte said the group qualified.

“We are not talking about the parent company, we are talking about the group companies in Italy, which employ thousands of people,” said the Prime Minister.

FCA operates several factories and research and development centers in Italy, directly employing around 55,000 people.

In addition, more than 200,000 people work in the 5,500 Italian spare parts suppliers and 120,000 people in car dealerships and service companies, with the automotive industry accounting for 6.2% of Italy’s domestic product, FCA said. .

The news that FCA was asking the Italian government for liquidity support drew criticism.

Ruling PD party vice-chairman Andrea Orlando said on Twitter earlier on Saturday that if a company asks the Italian government for significant funding, it must bring its legal base back to Italy.

The program is part of the emergency measures that the Italian government is making available to businesses in the country. It offers more than 400 billion euros in liquidity and bank loans to companies affected by the pandemic.

The FCA has said that the state-backed credit facility it seeks will “have the sole purpose of providing operational support for payments to Italian suppliers in order to support their liquidity and, at the same time, to support the restart of production and investments in Italian factories “.

The group has gradually resumed its activities in Italy since the end of April.

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