An investment banker called Guido Roberto Vitale has drawn up the latest in a series of plans for troubled Fiat which would see the Italian state take a stake in the group’s loss-making car arm, Italian newspapers said on Thursday, according to Reuters.
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Reuters cited the papers saying that, under Vitale’s plan, the state would take 33.7% of a group linking Fiat Auto and Fiat’s 56% stake in sports car group Ferrari with the government likely to invest via an infrastructure fund linked to the Treasury.
Reuters said the plan envisaged the shareholders in the new company — including Fiat’s creditor banks, Fiat and partner General Motors — pumping five billion euros into the ailing group and then floating it on the stock market, raising 1.55 billion euros ($US1.61 billion).
“The spin-off is an interesting idea in that it would separate the auto unit’s stock performance from the rest of the group and so create greater transparency,” a stock market trader told Reuters.
According to Reuters, Italian papers said the government’s stake in Fiat Auto would fall to 25% after the listing, with the Fiat group owning about 17% — or less if it decided to get out of cars all together to focus on its publishing, energy and insurance businesses.
Reuters said Vitale is an independent investment banker who has worked with the family of Italian prime minister Silvio Berlusconi in the past.
“I haven’t presented a plan on behalf of (Economy Minister Giulio) Tremonti but I wanted to help find a way of keeping Fiat Auto Italian so we don’t lose the technological and industrial history of our country,” the paper Il Sole quoted Vitale as saying, Reuters reported.
According to Reuters, Fiat executives are due to meet creditor banks on Thursday and sources told the news agency they would discuss the banks’ own plan to spin off Fiat Auto, which the Financial Times said would leave 2.0-3.0 billion euros of the division’s debt in Fiat’s pocket.
According to Reuters, the FT said the banks’ plan would pump two billion euros into Fiat Auto, raised from selling assets including aviation unit Fiat Avio. Fiat could then raise two billion euros via a share offer with the controlling Agnelli family playing their part.
The Agnelli’s own 34% of Fiat, mostly through their Ifi and Ifil holding companies, Reuters noted.
