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picture: 123RF/WELCOMIA
picture: 123RF/WELCOMIA

Milan — Stellantis is preparing early repayment of a €6.3bn loan backed by the Italian government that its predecessor, Fiat Chrysler, obtained at the peak of a Covid-19 outbreak, two sources close to the matter said on Thursday.

Repaying the loan potentially frees Stellantis from a set of conditions that Rome attached to it, including preserving jobs at its Italian operations, timely paying of suppliers that are crucial for local plants or financing domestic investments, in particular for electric vehicles.

The repayment is imminent, one of the sources said.

The loan, which carries a three-year maturity, was paid in June 2020 to Fiat Chrysler’s (FCA) Italian unit by the country’s top lender, Intesa Sanpaolo, with credit export agency SACE providing a guarantee on 80% of its amount.

The loan stirred controversy in Italy because Fiat Chrysler, which in recent years has moved its legal headquarters to the Netherlands, was at the time working to merge with French rival PSA, in a deal that included the payment of a large cash dividend to its shareholders.

Rome, however, agreed to back the loan to assure cash to one of the country’s largest employers, at a time when the Covid-19 pandemic and consequent lockdown measures had almost completely frozen the automotive market.

The automotive industry in Italy employs 278,000 direct and indirect workers and accounts for 6.2% of its GDP, according to data provided by automotive lobby ANFIA.

Reuters

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