The week started with good news for the Italian Fiat Chrysler Automobiles (FCA). The Italian audit court approved a decree by which the company is offered a state-guaranteed loan worth $7.1 billion. At the moment, it is the most significant loan that a European carmaker received.
The loan will be underwritten by the most prominent Italian bank, Intesa Sanpaolo. The money will be used to secure a state-backed facility for three years to ease the group's subdivision in the country and the car sector made of approximately 10,000 businesses.
Some believe that the loan for FCA is not a good idea, as the group is taking steps into a merger with the French PSA. But since December 2019, when the groups announced the $50 billion merger, things have changed. A PSA shareholder urges the automaker to revise the term of the merger, as it reflects on the downturn the automotive industry took due to the pandemic. Allegedly, the situation doesn't justify the 50-50 merger.
Unlike FCA, who took the loan, PSA moves in the opposite direction, its CFO stating that "the French company wants to be as free as possible of public dependence." The merger is going as planned, with PSA and FCA letting go of 1.1 billion EUR worth of dividends due to the negative impact of COVID-19.
FCA stock price is currently trading lower by more than 1.70%, while PSA is at -3.30%.
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Sources: reuters.com, europe.autonews.com