New York: Fiat Chrysler Automobiles NV expects debt to fall by at least 45 percent this year as the Italian-American carmaker enters the final stretch of a plan to turn liabilities into cash by selling more expensive autos. The stock jumped.
Net industrial debt will narrow to less than €2.5bn ($2.7bn) this year from €4.6bn at the end of 2016, Fiat Chrysler said in a statement yesterday. Fiat’s financials are getting a boost from rising earnings, which gained 26 percent to €6.1bn in 2016 as the company shifted sales to more lucrative sport utility vehicles and away from sedans.
Eliminating debt is one of the key challenges Chief Executive Officer Sergio Marchionne faces to fulfill an ambitious financial plan before he retires in 2019. Another obstacle is an investigation announced by US regulators in December over FCA’s alleged failure to disclose emissions-violating software. The company, which has been disputing the claims, didn’t say in the statement whether it would be setting aside a provision to cover potential fines and recalls.
