Fiat Chrysler Automobiles (FCA) stated on Thursday it has accepted a new credit facility with two banks, at a time when significant automakers are having to close plants, losing revenue as demand declines mainly because of the spread of coronavirus.
Majority of FCA’s plants across the world are presently closed in response to the virus emergency. Italian investment company Exor, which controls FCA, stated that the temporary closures might continue and rise depending on how the coronavirus impacts.
FCA stated the credit facility would be available for general corporate purposes and for working capital requirements of the group and that it was made as a “bridge facility” to favor its access to capital markets.
“This transaction confirms the continued strong support of FCA’s international key relationship banks in the current extraordinary circumstances,” the automaker stated, without making any specific connection between the new facility and the impact of the coronavirus which it is having on the global economy.
The facility can be drawn in a single portion of 3.5 billion euros ($3.8 billion), with an initial 12-month term which can be increased for additional six months. It adds to present credit facilities worth 7.7 billion euros, including lines for 1.5 billion euros that the company has begin to draw down, FCA stated.
FCA is in merger discussions with Peugeot owner PSA to form the world’s fourth biggest automaker. The deal is expected to be finalized by the first quarter of 2021.
Coronavirus has so far infected over 607,239 people and killed 27,674 worldwide.
