Reports in the Italian media say that Fiat has agreed with creditor banks to carry out a capital injection – rights issue – of up to three billion euros as part of the company’s rescue plan for its ailing car division, Fiat Auto. Press reports cited differing figures on the scale of the injection.
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The media reports say that Fiat’s main creditor banks would guarantee the capital injection.
Fiat executives met the heads of its main creditor banks – Sanpaolo IMI, Capitalia, UniCredito and Intesa – on Saturday to work on the rescue plan for Fiat Auto.
The capital increase plan has to be confirmed at a February 28 Fiat board meeting and may be accompanied by the sale of other Fiat Group assets.
According to reports, Fiat executives have also said that they will pursue the plan irrespective of whether GM plays a part in a refinancing of Fiat Auto.
However, details of the rescue plan have yet to be confirmed and sources report that Fiat may still be interested in gaining cash from GM in return for cancelling the 2004 ‘put option’ which can force GM to take over the 80 percent of Fiat Auto that it does not own. There is also a possibility that the put option could be put back a few years in return for a smaller cash injection from GM.
