Stellantis raises funds with 5 billion euro bond issue after EV setback

Stellantis said on Wednesday it had priced a multi-tranche hybrid bond offering worth about 5 billion euros ($5.8 billion), weeks after announcing multi-billion-euro charges tied to a reset of its electric vehicle strategy. The automaker last month said it would record 22.2 billion euros in impairments after scaling back its push into electric vehicles. Chief executive Antonio Filosa said the move reflected an overestimation of how quickly customers would adopt cleaner mobility.

As part of the plan, Stellantis said it would issue up to 5 billion euros in non-convertible subordinated perpetual hybrid bonds to support its balance sheet and maintain liquidity. The company said the offering, executed on Tuesday, includes three tranches: 2.2 billion euros in perpetual fixed-rate resettable notes with a 5.25-year non-call period and a 6.25% coupon; 1.8 billion euros in perpetual notes with an eight-year non-call period and a 6.875% coupon; and 865 million pounds ($1.16 billion) in perpetual notes with a 6.5-year non-call period and an initial coupon of 8.25%.

“This issuance will further strengthen Stellantis’ capital structure and liquidity position,” the company said in a statement. Settlement of the notes is expected on March 16.

The group, which owns brands including Jeep, Peugeot, Ram, Chrysler, Fiat and Citroen, is shifting to place greater focus on hybrid and internal combustion models, moving away from the EV-centred approach pursued under former CEO Carlos Tavares. The company said demand for fully electric vehicles has grown more slowly than earlier forecasts, particularly in the United States. Stellantis is scheduled to present its new long-term business plan on May 21.