Fiat Chrysler Automobiles (NYSE:FCAU) said on Tuesday that it has borrowed 6.25 billion euros ($6.8 billion) from a revolving line of credit in an effort to buffer its cash reserves while many of its factories remain closed amid the coronavirus pandemic.
The funds borrowed from the revolving credit facility are in addition to the 1.5 billion euros that FCA began drawing from other credit lines in March.
The outbreak of COVID-19 has clobbered auto sales and auto manufacturing around the world. Most of the world's auto factories have been forced to idle for weeks in response to social-distancing measures imposed to try to slow the spread of the virus. While some factories in China have managed to reopen, most others remain closed -- with uncertain timelines for restarting production.
That uncertainty has led other automakers, including both of FCA's traditional Detroit-area rivals, to draw down pre-existing lines of credit -- and in some cases, to seek additional funding -- to ensure that they have sufficient cash to weather the costly shutdown period.
Ford Motor Company (NYSE:F) drew down $15.4 billion from its lines of credit in March, and last week issued new bonds to raise an additional $8 billion. General Motors (NYSE:GM) also drew down its credit lines last month, adding about $16 billion to its cash hoard, and set up a new $2 billion revolving-credit line for its financial-services subsidiary.
It's not clear how much cash FCA has on hand as of right now. As of the end of 2019, FCA had 15.5 billion euros in cash, and an additional 7.6 billion euros in undrawn lines of credit. It has since drawn down all of those credit lines.
FCA said in early April that it had finalized an agreement with two banks to establish a new 3.5-billion-euro revolving-credit facility; that line remains undrawn.