Fiat Chrysler Automobile (NYSE:FCAU) has announced a $3.8 billion credit facility to help it manage through the coronavirus epidemic that has forced it to close most of its operations across the globe.
Fiat Chrysler receives short term credit facility
On Thursday, the automaker indicated that the amount from the credit facility will be available for working capital requirements as well as general corporate purposes. The credit facility from two banks has been structured as a short term loan or bridge facility. The funds will either be drawn in a single tranche in a 12-month term or can be extended at Fiat’s option for another 6-month term.
This new facility is an addition to the company’s current credit facilities of around $8.5 billion, which includes a bi-lateral credit line of around $1.65 billion that Fiat said it has begun to drawdown.
The Italian-American carmaker was impacted by the coronavirus outbreak early than most carmakers. Most of its factories are in Europe, especially in Italy, that had to close because of the COVID-19 pandemic temporarily. Following pressure from the United Auto Worker union, the company also announced that it was closing its domestic factories to combat the spread of the novel virus.
Fiat Chrysler to resume operations next month
So far, the company has reported three deaths of its employees as a result of the coronavirus pandemic. In its release on Thursday, the company said that it was taking necessary steps to help in flattening the curve of the spread of coronavirus. The company said they are placing the safety and health of the workers first.
Fiat Chrysler plants across Canada and the US, which includes operations at the headquarters and construction projects will remain closed up to April 14th. However, this will depend on the readiness of the facilities to commence production and the stay-in-place orders in various states. However, the Mopar Parts Distribution Centres considered essential to keeping commercial and first responders on the road will continue operations through paid volunteers.