Shares in the loss-making industrial group Fiat opened 1.9% higher on Monday after it nudged closer to debt-cutting targets by selling its stake in partner General Motors Corporation for $YS1.16 billion, Reuters reported.

According to Reuters, the sale, announced late on Friday, should help Fiat towards a target to cut net debt to less than 3.6 billion euros by early 2003 and took pressure off Fiat's need to sell other assets to cut borrowing and avoid a debt downgrade.

In an earlier report, Reuters said Fiat on Saturday agreed to sell most of its customer financing arm Fidis hours after off-loading the GM stake.

According to Reuters, Fiat said in a statement that the long-awaited sale of 51% of European financing unit Fidis to its four top creditor banks would cut around six billion euros off its gross debt, which stood at 32.8 billion euros at the end of September.

The reduction would come mainly through Fiat deconsolidating customer debts, passing the liability on to the banks, Reuters added.

Reuters noted that Fiat earlier this month also sold its Brazilian financing unit, which it said would cut gross debt by 800 million euros and net debt by 100 million.

Reuters added that there is still some way to go on debt-slashing as Fiat has promised creditor banks to cut gross borrowing to 23.6 billion euros by early next year, setting a net debt goal of three billion euros from 5.8 billion in September.

Reuters added that Fiat could cut another 1.1 billion euros off its debt by exercising a "put" option to sell its 24.6% stake in energy holding Italenergia to fellow investor Electricite de France to pay back loans owed to banks led by Citigroup.

According to Reuters, both GM and Fiat on Friday said that Fiat's sale of its GM shares to an investment bank they declined to name did not affect the "put" or their joint ventures in purchasing and car parts.

A financial source told Reuters the shares had been sold to Merrill Lynch, which is advising the insurance-to-publishing conglomerate Fiat on its restructuring.

GM had a first call on Fidis but passed it up earlier this year, Reuters added.