Auto parts maker Marelli secures $1.2bln financing to withstand crisis

Additional capital and loans worth from top shareholder U.S. investment firm KKR and Japanese banks.

  
Employees work on an assembly line at the Volkswagen car factory in Palmela, Portugal, December 9, 2016. Image used for illustrative purpose.

Employees work on an assembly line at the Volkswagen car factory in Palmela, Portugal, December 9, 2016. Image used for illustrative purpose.

REUTERS/Rafael Marchante

MILAN- Auto parts maker Marelli said on Wednesday it had secured additional capital and loans worth 130 billion yen ($1.2 billion) from top shareholder U.S. investment firm KKR and Japanese banks.

The COVID-19 epidemic has forced most manufacturers to temporarily halt production and almost erased car demand in March and April, leaving car and auto parts makers in need of cash.

"Access to this additional capital gives us the flexibility to withstand an extended market downturn and protects the long-term financial health of the business," Chief Financial Officer Christoph Hobo said in a statement.

Clients of Marelli, which combines former Fiat Chrysler unit Magneti Marelli and Japan's Calsonic Kansei, include Volkswagen, PSA and Fiat Chrysler.

($1 = 107.6900 yen)

(Reporting by Giulio Piovaccari, editing by Gianluca Semeraro and Jason Neely) ((giulio.piovaccari@thomsonreuters.com; +39 02 6612 9743; Reuters Messaging: giulio.piovaccari.thomsonreuters.com@reuters.net))

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