FCA has gradually restarted its operations in Italy since the end of last month after they were closed due to government coronavirus lockdowns. The automaker on Tuesday released plans detailing how it will resume North American production.
FCA, which has its legal headquarters in the Netherlands, runs several plants in Italy and may qualify for the government program, which offers more than 400 billion euros worth of liquidity and bank loans to companies hit by the pandemic.
FCA and Peugeot maker PSA Group decided earlier this week to scrap the 1.1 billion-euro dividends that each agreed to pay as part of their agreement to merge to create the world’s fourth-largest automaker. However, as part of the tie-up deal, FCA is also due to pay to its shareholders a special dividend of 5.5 billion euros just before the closing of the merger, which the two automakers confirmed was expected before the end of the first quarter of next year.
Representatives for FCA, Intesa and Sace declined to comment.
The loan would be the largest financing guaranteed by a European government during the pandemic after Renault’s 5 billion-euro deal last month.
In the first quarter, FCA’s industrial free cash flow was a negative 5 billion euros. But the company said it had available liquidity of 18.6 billion euros as of March 31, including a 6.25 billion revolving credit facility which was fully drawn down in April.
In a May 5 call with financial analysts, CFO Richard Palmer said the automaker’s cash burn in the second quarter would be likely worse than the first quarter because plants remained closed in April and part of May.
Last month, FCA also completed the syndication of a 3.5 billion euro credit facility with banks.