Fiat Cites Cap to Its Access to Chrysler’s Cash

Fiat SpA's acquisition of Chrysler Group LLC in January gives the Italian company badly needed access to the American carmaker's more than $14.6 billion (€10.7) in cash.

But Chrysler's financial documentation limits the distribution Fiat may receive to a formula indexed to 50% of the company's accumulated net income since January 2012, plus a one-time additional $500 million (€365 million). Fiat did not indicate what that total would be.

Distributions also are barred if Chrysler's liquidity drops below $3 billion. The unit's actual liquidity at the end of 2013 was nearly five times that amount and is unlikely to affect Chrysler's ability to make distributions.

Fiat notes that there are no restrictions on intercompany financing except covenants requiring transactions to be conducted at arm's-length terms or be approved by a majority of "disinterested" members of Chrysler's board.