FLORENCE, Italy (Reuters) - Italian carmaker Fiat SpA’s FIA.MI U.S. unit Chrysler is still working on a $3 billion loan refinancing, Fiat CEO Sergio Marchionne said on Thursday, confirming what sources had earlier told Reuters.
On June 12 Reuters reported that Chrysler UAWREC.UL had set terms on a loan refinancing that could lower its borrowing costs and make it possible for Fiat to access Chrysler’s cash flow.
Fiat owns 58.5 percent of Chrysler and wants to buy up the rest. Talks with the seller, an autoworkers’ union-affiliated healthcare trust, are continuing, Marchionne said on Thursday.
Asked for a progress report on the Chrysler loan talks, Marchionne said: “The transaction has not yet been concluded.”
The completion of an agreement is expected on June 21, Reuters had reported, citing banking sources.
Fiat aims to complete the transaction, merge the two carmakers into one group, then list the new company on the New York Stock Exchange by 2014, it has said.
Marchionne already runs the two automakers as a single group. But a full merger with Chrysler is seen increasing the group’s value, because the combined automaker would have more cash to invest in expensive new technology like hybrid engines.
Reporting by Stefano Rebaudo; Writing by Jennifer Clark; Editing by David Holmes