Stellantis secures billions in credit ahead of brand electrification

Automotive conglomerate Stellantis has secured €12 billion (AU$19B) in credit from 29 international banks, one month after announcing plans to embrace electric vehicle technology across its 15 automotive brands.

As the parent company of Alfa Romeo, Chrysler, Citroen, Fiat, Jeep, Maserati, Peugeot, Ram, and a handful of other US and European marques, the revolving credit facility (RCF) allows Stellantis to fund the development of battery-powered cars, as well as consolidating vehicle architecture for future models.

In June 2021, Ram, Alfa Romeo, and Fiat announced plans to pursue electric models in the coming years, falling into line with plans from Jeep, Maserati, and Peugeot.

While the Stellantis name may not be familiar, it is a result of a merger between Fiat-Chrysler Automobiles (FCA) and Peugeot Group (PSA) in January 2021. It is estimated to be the fourth largest car company in the world.

"This new RCF replaces the existing syndicated RCFs from the PSA and FCA, thereby providing an increase in the group’s overall liquidity and an extension of the duration of the facility," a statement from Stellantis read.

In June 2020 – prior to the merger – FCA was granted a €6.3 billion (AU$10B) loan from one of Italy's largest banks, with backing from the Italian Government of up to 80 per cent. 

Both the FCA and the Italian Government drew criticism from the announcement, as the company had already moved its headquarters to the Netherlands ahead of its merger with PSA.

At the time, it was estimated FCA had secured approximately €17.6 billion (AU$28B) in credit.

In the years following the Global Financial Crisis of 2007-2008, the then CEO of Ford Motor Company, Alan R Mulally, was praised for securing US$23.6 billion (AU$32.1B at today's rate) in loans from Wall Street banks in 2006.

Despite the US economy appearing to be healthy at the time, Mulally mortgaged company assets as "a cushion to protect for a recession or other unexpected event."

The credit put Ford in a better position for the impending years, while its traditional rivals General Motors and Chrysler had to be bailed out by the US Government to avoid bankruptcy.