IFIL SpA, the largest shareholder in unprofitable Fiat SpA, doesn’t expect the car company to ask shareholders for more money before the end of 2006, Dow Jones reported.
The news agency said that Fiat is currently asking shareholders to subscribe to a 1.8 billion euro rights issue as part of a larger 19.5 billion euro turnaround plan that seeks to bring the company to profit in 2006.
According to Dow Jones, although Fiat chief executive Giuseppe Morchio has said the plan is entirely ” self-financed”, investors have doubted that claim, especially after an attempt to secure a two billion euro loan fell through the night before Morchio presented his plan to the public.
Speaking to journalists and analysts in Milan, IFIL chairman Gianluigi Gabetti reportedly said: “We don’t expect any future cash calls” from Fiat.
Dow Jones said IFIL is the holding company through which the Agnelli family controls 30.4% of the carmaker Giovanni Agnelli founded 104 years ago. IFIL and IFI SpA, another Agnelli holding company which controls 63% of IFIL, have asked shareholders to subscribe to rights issues that began on Monday in order to fund their part of Fiat’s capital increase, the report added.