MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) (MI:FCHA) (N:FCAU) said on Thursday it had launched an expected share issue and a $2.5 billion mandatory convertible bond as it seeks to reduce its mounting debt pile and fund an ambitious five-year investment plan.
The newly created FCA, which moved its primary share listing to New York in October, wants to invest 48 billion euros ($59.45 billion) by 2018 to turn Jeep, Maserati and Alfa Romeo into global brands. The company hopes to take on Volkswagen (DE:VOWG_p) and BMW (DE:BMWG) by strengthening its position in the fast-growing and high-margin market for premium cars.
The carmaker said in a statement it would offer 87 million common shares. That includes treasury shares and stock that will be issued to replace shares that the company bought back, then canceled, from Fiat investors who opposed the recent merger into FCA. The underwriters have the option to purchase up to an additional 13 million shares, it added.
FCA also launched the offering of the $2.5 billion mandatory convertible bond, which matures in 2016. The bond is expected to pay an annual coupon. The underwriters have the option to buy an additional $375 million in mandatory convertible securities.
In a separate statement, FCA's controlling shareholder Exor (MI:EXOR), the holding company of the Agnelli family which founded Fiat, said it would participate in the bond issue by purchasing an amount that would protect its stake of around 31 percent from dilution.
(1 US dollar = 0.8074 euro)
(Reporting by Agnieszka Flak; Editing by Christian Plumb)