Fiat Chrysler meets US investors after launching bond, share offers

Fri Dec 5, 2014 12:58pm EST
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By Agnieszka Flak and Stefano Rebaudo

MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) (FCHA.MI: Quote) (FCAU.N: Quote) began meeting U.S. investors on Friday after launching a $2.5 billion convertible bond issue and a share sale to reduce its debt pile and fund an ambitious investment plan.

The newly created FCA, which moved its primary share listing to New York in October, wants to invest 48 billion euros ($59 billion) over five years to turn Jeep, Maserati and Alfa Romeo into global brands. The company hopes to take on Volkswagen (VOWG_p.DE: Quote) and BMW (BMWG.DE: Quote) by strengthening its position in the fast-growing and high-margin market for premium cars.

FCA Chief Executive Sergio Marchionne, who announced the share and bond offers in October and launched them on Thursday, kicked off a four-day roadshow with investors in New York, bankers said.

As part of a capital-boosting plan worth a total of 4 billion euros, Marchionne is also spinning off and listing Ferrari, giving shares in the iconic luxury sportscar maker to Fiat shareholders and investors who buy the convertible bond.

Ten percent of Ferrari will be sold in a public offering next year in the United States. [ID:nL5N0SO536]

FCA's shares have risen more than 40 percent since the plan was announced on Oct. 29 and hit their highest in 13 years this week on expectations that the bond issue would be fully covered given the sweetener of the Ferrari shares, traders said.

The stock was up 3.6 percent at $13.69 by 1746 GMT.

"If, as the market believes, the bond and shares have de-facto already been placed, then the only way to get Ferrari shares is to buy FCA stock and that's what is happening," one Milan-based trader said.   Continued...

People wait for the arrival of Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles (FCA), before he rings the closing bell to celebrate the company's listing at the New York Stock Exchange October 13, 2014. REUTERS/Eduardo Munoz