Fiat India Automobiles has secured a new credit line from a consortium of domestic and international banks to the tune of Rs 2500-crore (357 million euros) to help it expand the production of cars (under both the Fiat and Tata brand names) as well as powertrains at its Ranjangaon factory in Pune. Fiat India Automobiles is a joint venture between Fiat Group Automobiles and Tata Motors and it currently manufactures the Fiat Palio Stile, Linea, and, most recently, the Grande Punto, at its state-of-the-art factory.

"The company has finalised three syndicated secured credit facility agreements with a consortium of Indian and international banks for a total amount equivalent to Rs 2,500-crore," its said in a statement this week. Fiat India Automobiles is investing Rs 4,000-crore in the country in total and has been boosted this year by the strong reception that its latest two models the Linea, which arrived in the showrooms in January, and the Grande Punto, which arrived earlier this summer, have received from consumers.

The new syndicated credit facilities have been arranged by Citibank N.A which has operated through its Mumbai, London and Milan offices, and the arrangements include an External Commercial Borrowing (ECB) credit facility, that is supported by a guarantee policy issued by SACE (the Italian export credit agency), for an amount of 130 million euros, with a seven years year time line. This facility is being set aside for capital expenditures by Fiat India Automobiles. The arrangement, according to a statement issued by the company, includes a Rupee term credit facility for Rs 1,000-crore with a timeline of six years, that will also be used for capital expenditure purposes of the company, as well as a short-term revolving credit facility for an amount of Rs 600-crore, with a life of 364 days, intended for working capital purposes of the company.

The consortium of banks loaning funds to the tune of Rs 900-crore under the guise of the External Commercial Borrowing (ECB) credit facility are made up of Calyon, Citibank, Deutsche Bank and Natixis, while the lenders participating in the Rupee term credit facility comprise of the State Bank of India, IDBI Bank, Punjab National Bank and Union Bank of India. Finally the institutions participating in the Rupee Short-term revolving credit facility are the same four as those funding the Rupee term credit facility with the addition of Citibank.