NEW YORK (TheStreet) -- Shares of Fiat Chrysler Automobiles (FCAU) are up 2.50% to $13.55 in pre-market trade after the automaker said it launched an expected share offer and a $2.5 billion mandatory convertible bond as it seeks to reduce its mounting debt pile and fund an ambitious five-year investment plan, according to Reuters.
The newly created FCA, which moved its primary share listing to New York in October, wants to invest 48 billion euros ($59.45 billion) by 2018 to turn Jeep, Maserati and Alfa Romeo into global brands.
The company hopes to take on Volkswagen (VLKAY) and BMW by strengthening its position in the fast-growing and high-margin market for premium cars, Reuters said.
CEO Sergio Marchionne announced the share and bond offers in October, when he also shocked markets with his plan to spin off Ferrari, sell a 10% stake via a public offering and distribute the rest of FCA's stake in the luxury sportscar brand to its shareholders, Reuters noted.
FCA said in a statement yesterday that it would offer 87 million common shares. That includes treasury shares and stock that will be issued to replace shares that the company bought back, then canceled, from Fiat investors who opposed the recent merger into FCA. The underwriters have the option to purchase up to an additional 13 million shares, it added.
FCA also launched the offering of the $2.5 billion mandatory convertible bond, which matures in 2016. The bond is expected to pay an annual coupon. The underwriters have the option to buy an additional $375 million in mandatory convertible securities.