MILAN (Reuters) -- Fiat Chrysler Automobiles said it would issue a mandatory convertible bond for $2.5 billion and place up to 100 million of its shares to shore up funding for its 48 billion euro ($61 billion) investment plan.
Investors participating in the mandatory convertible offering will be entitled to receive shares in luxury carmaker Ferrari as part of a spinoff plan announced earlier on Wednesday.
Exor, the holding company of Italy's Agnelli family, which controls Fiat Chrysler, said it would invest around 600 million euros ($765 million) in the bond offering. Exor said the investment will be made by drawing on resources currently available.
The market has long said FCA, with a net debt of 11.4 billion euros at the end of September, needed to raise capital to strengthen its balance sheet, especially as it is still battling with losses in Europe and a weakening outlook for Latin America.
The world's seventh-largest carmaker, which moved its primary listing to New York on Oct. 13, said the share issue would include treasury shares and stock that will be issued to offset a buyback of shares from exiting investors as part of the merger into Fiat Chrysler Automobiles.
The group added in a separate statement it would repay ahead of maturity Chrysler bonds due in 2019 and 2012.