ROME – Italy has approved a decree offering state guarantees for a 6.3 billion euros ($ 7.1 billion) loan to the Italian unit of Fiat Chrysler, the Treasury said on Wednesday, paving the way for the biggest crisis loan in Europe to a car manufacturer.
The official announcement follows the approval of the country’s court of accounts and ends a lengthy loan approval process, which has drawn criticism in Italy.
By providing state support, Rome “aims to preserve and strengthen the Italian automotive supply chain,” Economy Minister Roberto Gualtieri said in a statement.
FCA’s Italian division has used Rome’s COVID-19 emergency funding programs to secure a state-backed three-year facility to help it weather the crisis triggered by the coronavirus pandemic. The aid will also help the wider Italian automotive sector, in which around 10,000 companies operate.
The loan will be disbursed by Italy’s largest retail bank, Intesa Sanpaolo, which has already cleared it pending approval of guarantees the government will provide on 80 percent of the amount through the agency. SACE export credit.
The request for state support has sparked controversy because FCA is working on a merger with French rival PSA and because FCA’s holding company is registered in the Netherlands.
FCA’s global brands include Fiat, Jeep, Dodge and Maserati.
Gualtieri said FCA should meet its investment and jobs commitments, but declined to say whether the Treasury has imposed conditions affecting the expected extraordinary dividend of € 5.5 billion (€ 6.2 billion dollars) of FCA, a key part of the merger with PSA.
Italian politicians have questioned the dividend, although it should be compatible with the terms of the financing, as it is not due until 2021 and would be paid by the Dutch parent company of FCA Italy, Fiat Chrysler Automobiles NV.
FCA did not immediately comment.