Daimler seeks over $11 billion credit line to weather crisis, report says

Daimler AG is in talks with banks over arranging a new credit facility of at least 10 billion euros ($11 billion) to help it navigate the fallout from the coronavirus pandemic, people familiar with the matter told Bloomberg.

Daimler is seeking a credit line of 10 billion euros to 15 billion euros and an announcement on the final amount could come as early as next week, said the people, who asked not to be identified because deliberations are private. Talks with potential lenders are ongoing and the exact timing and structure of the deal could still change, they said.

The move is part of a range of measures to shore up the financial muscle of the maker of Mercedes-Benz cars and trucks during the coronavirus crisis, said the people. 

Daimler declined to comment. It had signed an 11 billion-euro credit line two years ago with a group of international banks. This facility offered funding until 2025. The new credit facility would come on top of the existing one.

Fiat, Airbus

Global automakers face an unprecedented challenge after the pandemic crippled demand from China to Europe and the U.S.

Governments have imposed restrictions on citizens, businesses and transportation to fight the outbreak.

Last week, Daimler and other European manufacturers were forced to halt output at their factories in the region and have since expanded closures to sites in North America.

Other industrial giants are also taking steps to boost liquidity. Fiat Chrysler Automobiles signed a new 3.5 billion-euro credit facility with two banks, the automaker announced Thursday. 

Stuttgart-based Daimler said Thursday it will move to short-time work at its domestic operations. Under German rules the state pays part of the reduced salary for employees. Avoiding mass layoffs helped German manufacturers ramp up production after the financial crisis a decade ago.

Source link