Italian PM Giuseppe Conte Says Fiat Chrysler (FCAU) Eligible For State-Backed Loan

By Amit Chowdhry ● May 17, 2020
  • Fiat Chrysler Automobiles NV (NYSE: FCAU) is entitled to apply for Italian state-backed loans, according to Prime Minister Giuseppe Conte

Fiat Chrysler Automobiles NV (NYSE: FCAU) is entitled to apply for Italian state-backed loans, according to Prime Minister Giuseppe Conte via Reuters. The automaker is eligible since it employs thousands of people in Italy despite its headquarters being located abroad.

Fiat Chrysler’s Italian unit is working with the Italian government to obtain state guarantees on a 6.3 billion euro loan facility for helping the automotive industry in Italy, which is comprised of about 10,000 small and medium-sized businesses.

The effects of the COVID-19 pandemic rippled across the world and especially hit Italy hard. And the demand for new vehicles in Italy also slowed down. And this caused automakers to halt production and take a major hit on earnings.

Fiat Chrysler Automobiles NV (NYSE: FCAU) is in ongoing talks with Intesa Sanpaolo Spa (OTCMKTS: ISNPY) for a three-year credit facility for its operations in Italy.

Conte noted that even though FCA’s legal headquarters are in the Netherlands, it could get a loan guaranteed by the Italian government.

“We’re not talking about the parent company, we’re talking about the group’s companies in Italy, which employ thousands of people,” said the prime minister.

Fiat Chrysler Automobiles NV (NYSE: FCAU) has several plants and R&D centers in Italy, which directly employs about 55,000 people. And over 200,000 people work across 5,500 parts suppliers and 120,000 across car dealerships and service companies. The auto industry accounts for about 6.2% of Italy’s domestic product.