Fiat SpA ( FIATY) has been approaching banks in an effort to refinance their existing 1.9 billion euro ($2.5B) credit line before making a deal to acquire a 41% stake in Chrysler held by the United Auto Workers' medical benefits trust. This action, on behalf of CEO of both companies, Sergio Marchionne, would combine the two regional car companies into a truly global auto manufacturer.
A refinancing deal would help Fiat make up for a loss on brands in European markets of around 700 million euros. Currently the Italian firm is relying on sales from Chrysler to sustain its earnings. Credit offered to Fiat may be directed to use with Chrysler's assets if talks with the UAW are successful.
In February 2013, the UAW confirmed talk were under way between the trust fund and Fiat representatives regarding a possible sale of its stake. In early March of the same year Marchionne confirmed Fiat had begun the valuation process for retirees holdings within the trust, and on March 19th he projected a court ruling on how much Fiat will pay to acquire those holdings in June or July.
If Fiat can secure refinancing and talks with the UAW are successful, the two companies may become one "sometime this year," according to Marchionne at the 2013 Geneva Motor Show.
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