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Old 26th August 2009, 13:29   #1
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Default Fiat India Obtains New Credit Line To Fund Major Production Expansion

this should instill more faith for FIAT car owners about FIAT's plans in INDIA, new customer confidence will be boosted...

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Fiat India Automobiles has secured a new credit line from a consortium of domestic and international banks to the tune of Rs 2500-crore (357 million euros) to help it expand the production of cars (under both the Fiat and Tata brand names) as well as powertrains at its Ranjangaon factory in Pune. Fiat India Automobiles is a joint venture between Fiat Group Automobiles and Tata Motors and it currently manufactures the Fiat Palio Stile, Linea, and, most recently, the Grande Punto, at its state-of-the-art factory.

"The company has finalised three syndicated secured credit facility agreements with a consortium of Indian and international banks for a total amount equivalent to Rs 2,500-crore," its said in a statement this week. Fiat India Automobiles is investing Rs 4,000-crore in the country in total and has been boosted this year by the strong reception that its latest two models the Linea, which arrived in the showrooms in January, and the Grande Punto, which arrived earlier this summer, have received from consumers.

The new syndicated credit facilities have been arranged by Citibank N.A which has operated through its Mumbai, London and Milan offices, and the arrangements include an External Commercial Borrowing (ECB) credit facility, that is supported by a guarantee policy issued by SACE (the Italian export credit agency), for an amount of 130 million euros, with a seven years year time line. This facility is being set aside for capital expenditures by Fiat India Automobiles. The arrangement, according to a statement issued by the company, includes a Rupee term credit facility for Rs 1,000-crore with a timeline of six years, that will also be used for capital expenditure purposes of the company, as well as a short-term revolving credit facility for an amount of Rs 600-crore, with a life of 364 days, intended for working capital purposes of the company.

The consortium of banks loaning funds to the tune of Rs 900-crore under the guise of the External Commercial Borrowing (ECB) credit facility are made up of Calyon, Citibank, Deutsche Bank and Natixis, while the lenders participating in the Rupee term credit facility comprise of the State Bank of India, IDBI Bank, Punjab National Bank and Union Bank of India. Finally the institutions participating in the Rupee Short-term revolving credit facility are the same four as those funding the Rupee term credit facility with the addition of Citibank.
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Old 26th August 2009, 13:38   #2
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This was there in the ET a few days back. Obviously with Ratan Tata in the Fiat Board and cross holding, This also goes to show that FIAT is committed to a long India innings. I hope they localise the FIAT 500 so that I can buy one
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Old 26th August 2009, 14:54   #3
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Instead of spending all of the loan on its plant, Fiat should probably spend some of it on improving customer experience at dealerships and service centres.
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Old 26th August 2009, 19:46   #4
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Nice! Bet their credit rating shot up after their monthly turnover shot up to 120 - 130 crores (800 Lineas, 1700 Puntos & 200 Palios). In other words, nearly 20 times in just a year!
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Old 27th August 2009, 10:49   #5
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Good sign for Fiat !

Also, now they can hire an even expensive cricketer tha Yuvraj and make him sit in a Fiat car ! Or Yuvraj can get Lamborghini and Fiat pays the duties !!

Disclaimer: Fiat is capable of doing such things. Hope they don't fall into such traps.
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Old 5th September 2009, 16:43   #6
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Related news: Fiat plans to source parts worth $1 billion from India in 2010. Out of this, $700 million would be for Fiat India and rest would be exports.

$700 million for Fiat India? For 3 car models, one of which is a dud? Does it seem okay?

I bet there are more powerful engines coming up.

Source: Economic Times.
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Old 5th September 2009, 17:13   #7
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Quote:
Originally Posted by amit View Post
Related news: Fiat plans to source parts worth $1 billion from India in 2010. Out of this, $700 million would be for Fiat India and rest would be exports.

$700 million for Fiat India? For 3 car models, one of which is a dud? Does it seem okay?

I bet there are more powerful engines coming up.

Source: Economic Times.
I would think they would be planning to make India their regional sourcing Hub. 3500 Cr of spare parts when their anuual turnover is not even 1000 Cr( IIRC) is not possible.
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Old 5th October 2012, 21:12   #8
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Default Re: Fiat India Obtains New Credit Line To Fund Major Production Expansion

A news item from July 1997 about Fiat India's plans in Times of India:

Fiat India Obtains New Credit Line To Fund Major Production Expansion-picture-312.jpg
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Old 5th October 2012, 22:56   #9
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Default Re: Fiat India Obtains New Credit Line To Fund Major Production Expansion

Finally they are walking the talk.

I wonder if they have an plans for AT variants in their current lineup. That should round up their current lineup pretty well by addressing a growing need in view of the ever worsening traffic in all major urban locations in India.

As for those advocating investment in front end i.e. customer experience at the contact points , that is like putting the cart before the horse. Let the capacities be ramped up, scale economies make themselves visible, the dealer network upgradation shall follow.
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