UPDATE 4-Fiat denies it will raise bank funds for Chrysler buy

Fri Dec 14, 2012 1:50pm EST
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By Jennifer Clark and Paul Ingrassia

MILAN/NEW YORK Dec 14 (Reuters) - Italian carmaker Fiat SpA rebutted a report that it was set to raise money from banks to finance its purchase of more of Chrysler, saying it had no need for such funds.

Instead, Sergio Marchionne, chief executive of Fiat and Chrysler, said on Friday that Fiat could raise cash by selling assets such as its components unit Magneti Marelli.

At a brief, impromptu news briefing in New York, Marchionne said Fiat has no need to tap the debt or equity markets to raise cash for the planned purchase of remaining Chrysler shares. Fiat owns 58.5 percent of the No. 3 U.S. automaker.

While Fiat has ample cash on hand, he added, it could raise additional money if needed by selling assets, citing Magneti Marelli, which had revenue of 5.8 billion euros ($7.6 billion)last year, as an operation that could be sold.

In the current weak economic environment, Marchionne said, "the availability of cash is crucial. It's better to be safe than sorry."

In Italy, Fiat commented on an unsourced report in Il Messaggero that said Fiat was sounding out UniCredit, Morgan Stanley, Bank of America and Goldman Sachs about the possibility of raising between 1 and 2 billion euros.

"Fiat states there is no specific project in such respect, and believes that there is no need for a capital increase," the company said in a statement on Friday.   Continued...