Stellantis repays $7B Italy state-backed loan in advance

Europe

MILAN — Stellantis said its unit FCA Italy and other Italian subsidiaries had repaid a 6.3 billion euro ($7 billion) loan to Italy’s top lender Intesa Sanpaolo.

The loan was “instrumental” in the restart of industrial production after the COVID-19 outbreak and provided continuity for key investment projects, the company said in a statement on Friday.

It provided liquidity to the automaker’s business in Italy and to its Italian suppliers, the statement said.

The loan had a three-year maturity and credit export agency SACE provided a guarantee on 80 percent of its amount.

Stellantis said it was now in a position to repay it, ahead of its maturity in March 2023.

The automaker was formed in January 2021 from the merger of PSA Group and Fiat Chrysler. Stellantis’ business in Italy has been benefiting from high levels of cash and synergies from the merger, helping the company to repay the loan.

Italy’s finance ministry approved the loan to Fiat Chrysler in June 2020 to pay workers’ salaries, suppliers and for planned investments at facilities in the country.

Under the terms of the loan agreement, Stellantis was committed to continue production activities in Italy and refrain from reducing the workforce.

Bloomberg contributed to this report

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