The share sale of the largest auto maker in Italy, Fiat Chrysler Automobiles NV, will be done at a discount of 4.1% after on Wednesday the auto makers stock plunged the most since its debut on the New York Stock Exchange in October.
Fiat Chrysler made an official statement that an offering of 87 million common shares was priced at $11 a piece. In addition, the pricing of $2.5 billion in bonds, which are scheduled to be converted into companys shares on December 15th 2016, was revealed. The rights for acquiring an additional 13 million shares and an extra $375 million of the convertibles are provided to the banks underwriting the funding.
The offering comes at a moment when Fiat Chrysler has been trying to cover its debt and finance an ambitious and expensive new-model investment plan. It also comes only a couple of months after the merged company was listed on the New York Stock Exchange and is considered a part of a more excessive capital-raising effort, which includes a spin-off of the Ferrari supercar luxury unit through an Initial Public Offering in 2015.
In a filing that was issued last week, the company revealed that the funding is to boost cash holdings from almost €18 billion as of September 30th to almost €21 billion ($26 billion).
The Italy-based auto manufacturer announced its intentions to use the net proceeds gathered from the two offerings for general corporate purposes. The Chief Executive Officer of the merged Italian company, Sergio Marchionne, is trying to raise about $5 billion in order to reduce Fiat Chryslers constantly increasing debt.
Fiat Chrysler also said that Goldman Sachs, UBS, Citigroup, Barclays, J.P. Morgan, Morgan Stanley and BofA Merrill Lynch are appointed to act as joint book-running managers of the share offering.
Fiat Chrysler Automobiles NV lost 1.31% to trade at €9.07 per share as of 8:30 GMT, but marking a one-year gain of 72.11%. According to the Financial Times, the 18 analysts offering 12 month price targets for Fiat Chrysler Automobiles NV have a median target of €10.65, with a high estimate of €13.30 and a low estimate of €5.00. The median estimate represents a +15.89% increase from the last price of €9.19.
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