Photo: FCA
Fiat Chrysler Automobiles is set to get a profit boost in the coming years, without selling more cars.
The Italian-American company now has access to funds that were previously restricted from being transferred outside the American unit of the corporation. Thanks to those funds, which amount to some $13 billion, the group’s CEO can now borrow less money and use the liquidity to expand the two merged companies.
According to analyst estimates obtained by Bloomberg, the corporation led by Sergio Marchionne could save up to one billion euros ($1.09 billion) on financing in 2018. The estimate provided by three analysts to Bloomberg is an average of the values presented by the specialists.
Chrysler has gathered the estimated $13 billion after buying back bonds, but the FCA could not access the funds as it set up its headquarters in Europe.
Sergio Marchionne will update the corporation’s financial forecast this week, and financial analysts expect the net income of Fiat to be a direct beneficiary of the newly accessible funds.
At the beginning of this year, Fiat Chrysler Automobiles made Ferrari a separate financial entity. The move led to a drop in FCA shares, but Marchionne expects the company to recover after his investment and restructuring plan.
Fiat Chrysler Automobiles is the world’s seventh-largest automaker. The company was formed in 2014 from the merger of Fiat and Chrysler into a new holding company. The FCA holding was incorporated in the Netherlands and headquartered in London, for financial reasons.
The move didn’t go lightly with several voices in the United States of America, who were concerned about the fact that the carmaker’s financial headquarters were being moved to Europe after the bailout of 2009 using the United Auto Workers pension fund and US government aid. Fiat paid $4.9 billion to acquire Chrysler, along with a $5.5 billion pension liability.
Fiat Chrysler Automobiles is operated through two subsidiaries, FCA Italy and FCA US. The company plans to reach a revenue of 132 billion euros by the year 2018.
According to analyst estimates obtained by Bloomberg, the corporation led by Sergio Marchionne could save up to one billion euros ($1.09 billion) on financing in 2018. The estimate provided by three analysts to Bloomberg is an average of the values presented by the specialists.
Chrysler has gathered the estimated $13 billion after buying back bonds, but the FCA could not access the funds as it set up its headquarters in Europe.
Sergio Marchionne will update the corporation’s financial forecast this week, and financial analysts expect the net income of Fiat to be a direct beneficiary of the newly accessible funds.
At the beginning of this year, Fiat Chrysler Automobiles made Ferrari a separate financial entity. The move led to a drop in FCA shares, but Marchionne expects the company to recover after his investment and restructuring plan.
Fiat Chrysler Automobiles is the world’s seventh-largest automaker. The company was formed in 2014 from the merger of Fiat and Chrysler into a new holding company. The FCA holding was incorporated in the Netherlands and headquartered in London, for financial reasons.
The move didn’t go lightly with several voices in the United States of America, who were concerned about the fact that the carmaker’s financial headquarters were being moved to Europe after the bailout of 2009 using the United Auto Workers pension fund and US government aid. Fiat paid $4.9 billion to acquire Chrysler, along with a $5.5 billion pension liability.
Fiat Chrysler Automobiles is operated through two subsidiaries, FCA Italy and FCA US. The company plans to reach a revenue of 132 billion euros by the year 2018.
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