Fiat talking to banks, prepping for Chrysler purchase

[nadepalma]

Fiat prepping for Chrysler purchase with banking talks, report says
February 12, 2013

(Bloomberg) -- Fiat S.p.A. is discussing financing options with banks to strengthen its balance sheet in preparation to buy the Chrysler Group LLC stake it doesn't own, three people familiar with the matter told Bloomberg.

Sergio Marchionne, CEO of both automakers, has held talks with banks to help pay for at least some of the 41.5 percent held by the UAW medical benefits trust for Chrysler retirees, said the people, who asked not to be identified because the talks are private. A final deal may take months because Fiat and the trust disagree over the value of the shares, they said.

Marchionne is evaluating options that include a bridge loan to complete the deal, two of the people said. The Italian carmaker may pay around 2.23 billion euros ($2.98 billion) to buy the remaining stake, according to an estimate from Goldman Sachs Group Inc., which sees a deal possible within 12 months.

"Fiat has to sell assets or has to sell shares," Harald Hendrikse, an analyst at Citigroup in London, wrote in a note to investors yesterday.

The Italian carmaker has announced plans to exercise options to raise its Chrysler holding to 65 percent from the current 58.5 percent. Fiat has yet to receive those shares from the trust because the two are disputing the automaker's valuation amid the trust's efforts to sell part of its stake in an initial public offering.

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[69project]

This seems like another nightmare experience getting ready to happen for Chrysler. Fiat needs to make sure they do not kill the cash cow while milking it.

[johnstarnes]

Chrysler was nearly destroyed by Mercedes, has yet to recover. NO!!!

[richmond2000]

Chrysler was nearly destroyed by Mercedes, has yet to recover. NO!!!

ONE MAJOR difference between MB and FIAT is FIAT is working WITH CHRYCO and improving BOTH FIAT and CRYCO products MB only raided the PIGGY bank and left CRYCO to rot while killing there own products