Fiat Chrysler has agreed to the conditions laid down for a state-backed 6.3 billion euro ($7.1 billion) loan, including a promise not to relocate or cut jobs, Italy’s Sole 24 Ore daily said Sunday.
The state auditor has approved the guarantee, but it still needs to be signed off on by the economy ministry, the paper said.
The request for state support on such a large loan has proved controversial, particularly with the company’s corporate headquarters in Amsterdam.
FCA – which directly employs close to 55,000 people in Italy – has said the loan is essential to help the group’s Italy operations and the whole industry to weather the crisis triggered by the coronavirus pandemic.
The company will commit to investing 5.2 billion euro in Italy on new and existing projects, and up to 1.2 billion euro on its 1,400 or so foreign suppliers, said Sole 24 Ore, Italy’s financial newspaper.
FCA will also pledge not to cut any jobs before 2023.
The loan will be funded by Italy’s largest commercial bank Intesa San Paolo and 80% guaranteed by export credit agency SACE, the daily said.
The government has said FCA would face sanctions if it failed to stick to the conditions laid down for loan. Sole 24 Ore said the fine for breaking the agreement could be in the region of 500 million euros.