Dow Jones reports that Fiat SpA (F.MI) will present more details of the spin-off of its truck and tractor units to bankers by June 30, as it seeks to refinance more than EUR3 billion of debt, two people familiar with the situation said Monday.
"Talks between Fiat top executives and officials at the five banks involved started at the end of last week and will continue until the end of the month," one of them told Dow Jones Newswires on condition of anonymity.
Meanwhile, the Associated Press reports that CNH Global N.V. plans to offer $1 billion in 7-year bonds to pay back older debt.
The company plans to use the cash to buy back $500 million in 7.125 percent notes that come due in 2014 and pay off debt that it owes Italy's Fiat SpA., which is CNH Global's majority owner.
The company said it expects to complete the offering in the next few days.
The Italian industrial group behind Fiat cars, Iveco trucks and CNH Global NV (CNH) tractors needs to refinance the EUR3 billion debt, which expires by year-end.
In a May 26 note, UBS analysts said Fiat might be forced to postpone the spin-off, planned for the end of the year, if it doesn't refinance the debt in good time. The refinancing is important for analysts and investors because it will give them a better understanding of how Fiat's entire debt will be distributed between the new company of trucks and tractors and the other of cars.
At the April 21 presentation of its plans for the spin-off, Fiat said its net industrial debt would be evenly shared by the two new companies. The bonds, however, would remain with the company harboring the car activities.
Over the next nine months, Fiat has EUR3.4 billion of loans maturing, EUR500 million of bonds maturing and EUR800 million of "other debt" maturing, according to that presentation.
The banks involved in the talks with Fiat are France's BNP Paribas SA (BNP.FR) and Credit Agricole SA (ACA.FR) unit Calyon; Citigroup Inc (C) of the United States; and Italy's Intesa Sanpaolo SpA (ISP.MI) and UniCredit Group (UCG.MI), the people told Dow Jones Newswires.
Fiat has declined to comment on the talks, saying the board will review their progress at the meeting on July 21.
Fiat plans to spin off its CNH tractor and Iveco truck businesses into a separate company to be called Fiat Industrial (FI). Its remaining business including the Fiat car brand will be a separate company.
"The five banks could play a bigger role if Fiat succeeds in listing FI as planned," the second person said.
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