Fiat Seeks to Refinance Credit Line to Buy Chrysler

Fiat SpA is in talks with banks about refinancing its existing €2 billion credit line as soon as next month, according to Bloomberg News.

The news service cites anonymous sources who say a bank deal would help the company acquire the 41.5% of Chrysler Group LLC it doesn't already own. The current credit facility is set to expire next year.

Fiat-Chrysler CEO Sergio Marchionne confirmed last month that Fiat was in discussions with lenders about the possibly borrowing an unspecified amount to buy Chrysler. But Marchionne continues to insist that the Italian carmaker has enough cash to make the purchase without a loan, if it so chooses.

Analysts have suggested that Fiat might opt to raise extra funds to reassure investors about the stability of its balance sheet as the company simultaneously restructures European operations and purchases Chrysler.

The timing and cost of an acquisition depends on resolving a dispute between Fiat and Chrysler's minority shareholder about the value of the remaining stock. Marchionne predicts a court will decide the matter by July.