Fiat Chrysler in talks for $6.8 billion SACE guaranteed loan

(Reuters, Milan, 15 May 2020)) Fiat Chrysler is in talks with Intesa Sanpaolo (ISP.MI) over a 6.3 billion euro ($6.8 billion) loan backed by Italian ECA SACE to help the automaker weather the coronavirus crisis. Fiat Chrysler (FCA) has gradually restarted its operations in Italy since the end of April. The crisis erased demand for new vehicles and pushed manufacturers to halt most production, burning cash. The loan, which is part of emergency liquidity measures the government is making available to Italy’s businesses, must be approved by Intesa Sanpaolo’s board, the source said. FCA, Intesa and SACE declined to comment. FCA and Peugeot owner PSA (PEUP.PA), which have struck a binding merger agreement to create the world’s fourth largest carmaker, earlier this week scrapped their planned ordinary dividends on 2019 results, worth 1.1 billion euros each, due to the COVID-19 pandemic. SACE approved state guarantees covering 80% of the bank loan after the loan was approved by Italy’s biggest retail bank Intesa Sanpaplo.