|
Fiat Group on Friday
announced that it had obtained a 1 billion euro credit line
as it prepares to meet debt obligations that fall due for
repayment this year. However with the Italian industrial
group having liabilities of 4.8 billion euros in maturing
debt to service, this new extension of credit is seen by
most as merely a precursor to a greater influx of new
financing.
The new 1 billion euro
credit line is being put together by a trio of finance
institutions. Two leading Italian banks, Intesa Sanpaolo
(the country's biggest bank) and Unicredit, are joined by
French firm Credit Agricola; the latter institution is
already a joint partner in the Fiat Group's automotive
retail financing operations.
The 1 billion euro line is
much lower than analysts had been forecasting, they had been
expecting a figure around three times that amount. At the
end of last month Italian news agency Ansa
quoted Enrico Salza, the chairman of
the management board at the Intesa
Sanpaolo as saying during a
conference that a new credit line,
worth round 3 billion euros, was
"almost ready and only the technical
details are being worked out."
However later on the same day Reuters
then reported
that Salza 'had corrected his
earlier statement, saying there had
been a "misunderstanding" since the
actual amount was still being
discussed'.
Analysts
yesterday were not particularly impressed by the size of the
new credit line. "It's very little," one industry analyst
told Reuters on condition of anonymity. "It [Fiat]
will probably end up doing a capital increase or issue a
convertible bond." There has been much recent newswire talk
of a capital rights increase or the issuing of a convertible
bond; the latter though would be expensive to service in the
current economic climate. La Repubblica newspaper
last month quoted Agnelli family sources (which hold 30 pct
of Fiat stock) as being prepared for a capital increase that
would in part fund a rumoured merger with French carmaker
PSA Peugeot-Citroën. Last Tuesday Fiat quickly responded to
newswire stories of an impending capital increase with a
very short statement dismissing the talk out of hand: "Fiat
has no capital increase under consideration," the press
release issued in Turin read. "The comments published by a
news agency today are, therefore, entirely without
foundation," it added.
|
