Fiat 'readying' $10-billion financing for Chrysler

Italy's Fiat is in talks for as much as $10 billion in financing from a pool of banks to buy the stake in Chrysler it does not already own and refinance the two automakers' debt, Bloomberg reported on Thursday.

Citing people familiar with the matter, the report said the banks were discussing lending Fiat the money to buy a 41.5 per cent stake in Chrysler held by the United Auto Workers' healthcare trust Veba.

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Fiat and Chrysler CEO Sergio Marchionne aims to complete the purchase by the end of the summer, pending the results of a legal dispute between Fiat and the healthcare trust over the value of its Chrysler stake, it said.

Fiat already owns 58.5 per cent of the US carmaker.

Fiat is planning a two-step deal which would see it first buying the remaining Chrysler stake and later refinance its debt in a planned merger with its American unit, Bloomberg said.

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One option being explored is to create a new company in the United States, merge Fiat and Chrysler into it and issue shares in the combined entity, it said.

Current Fiat owners would exchange their shares for a stake in the new company.

The Agnelli family, which controls Fiat, would end up with a minority stake.

Fiat declined to comment on the report.