| Author |
Message |
Peter S�derlund /328 GTB -88 (Corsa)
Junior Member
Username: Corsa
Post Number: 139
Registered: 4-2001
| | Posted on Wednesday, March 27, 2002 - 2:45 pm: | |
Or Bin L....
New model to be introduced: Fiat Antrax
Be aware
Ciao
Peter |
TomD (Tifosi)
Member
Username: Tifosi
Post Number: 445
Registered: 9-2001
| | Posted on Wednesday, March 27, 2002 - 2:35 pm: | |
no its kadafi |
Ken (Allyn)
Member
Username: Allyn
Post Number: 256
Registered: 10-2001
| | Posted on Wednesday, March 27, 2002 - 2:32 pm: | |
I can't help but think the Sultan Of Brunai is somehow behind all this. |
TomD (Tifosi)
Member
Username: Tifosi
Post Number: 444
Registered: 9-2001
| | Posted on Wednesday, March 27, 2002 - 2:15 pm: | |
just as I predicted in my previous post. They like the libyan money - told you |
Peter S�derlund /328 GTB -88 (Corsa)
Junior Member
Username: Corsa
Post Number: 138
Registered: 4-2001
| | Posted on Wednesday, March 27, 2002 - 2:08 pm: | |
From Automotive News Europe
Ciao
Peter
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Fiat has so far failed to slash its huge debt load by selling assets. But there is intriguing talk in Turin about new ways to raise a lot of money fast.
The group wants to cut its net debt from E6 billion at the end of 2001 to E3 billion by the end of this year. It says it failed to achieve a similar target last year because of the effects of the September 11 terrorist attacks.
Fiat still plans to sell parts of its business. But since that strategy has not worked out as planned, two shortcuts could be used: floating Ferrari, and a major capital increase by Libya's foreign investment agency, the Libyan Arab Foreign Investment Co. (LAFICO).
The Libyans saved Fiat from bankruptcy in 1976 and there are signs that they will come to the rescue again.
On February 27, the Libyan group acquired 2.27 percent of Fiat's voting shares on the open market. The E145 million investment makes it the company's fifth largest shareholder.
Fiat Honorary Chairman Giovanni Agnelli saluted the return of the Libyans. "This is another sign of confidence in Fiat," he said.
Fiat group paid E1.03 billion in interest on debt last year, while operating income was just E318 million. The only way to improve profitability is to cut interest costs by reducing debt.
Fiat is trying to sell assets valued at E4 billion. Most of the cash would be raised by selling off components arm Magneti Marelli. Marelli's various units are valued at over E2 billion. But the supplier has been for sale since late 2000 and so far only one deal has been completed - a March 3 agreement to sell 70 percent of its aftermarket division to private investors. The transaction was worth E70 million.
The expected sale of Marelli's chassis system division to ThyssenKrupp of Germany has not been completed. The two companies signed a memorandum of understanding in March 2001 that valued the division at between E450 million and E550 million. But after September 11, the German company reviewed the deal. ThyssenKrupp is said to have made a new offer of just E250 million.
"There's a 50-50 chance that we'll be successful," said ThyssenKrupp CEO Ekkehardt Schulz recently. "It's a question of valuation."
Besides Marelli, Fiat also wants to sell its Fiat Avio aerospace division; its Teksid foundry arm; and Fiat Engineering, the civil engineering unit. It also wants to raise E250 million from the sale of real estate. In addition, an initial public offering is planned for Comau, its industrial equipment maker. But other ideas may be under consideration.
The idea of selling a minority stake in Ferrari has surfaced several times during the last two years. Fiat group owns 90 percent of Ferrari. Piero Ferrari, the son of company founder Enzo Ferrari, owns the remaining 10 percent.
Financial analysts say that Ferrari could be worth from 1.2 to two times its revenues of E1.04 billion last year. But Fiat would never give up total control of Ferrari, so no more than 49 percent of its stake would be sold.
"At some time in the future it could be interesting for Ferrari to consider the opportunity of a possible quotation," said CEO Luca di Montezemolo. "But any eventual decision would be up to our shareholders [Fiat group]."
The most interesting alternative to the sell-off strategy is the new Libyan connection. The cash-rich Libyan group could solve Fiat's debt problem overnight, as it did in 1976.
In December of that year the Libyan investment bank bought into Fiat through a $415 million (E471 million) dedicated capital increase. That gave it two seats on the board and 10 percent of voting shares.
Fiat says the Libyan board members were always silent and subscribed to all capital increases and bond conversions. LAFICO eventually owned 15 percent of Fiat. When the US government forced Fiat to sell its Libyan stake in September 1986, LAFICO cashed in $3 billion, or seven times its initial investment.
Could the Libyans once again become a major Fiat shareholder? Some signs suggest that this is not pure fantasy.
When the Agnelli family floated its Juventus football team in January, LAFICO bought 5.3 percent and said it intended to increase its stake to 20 percent. Was this an attempt to see how the business community would react to the return of the Libyan oil dollars to Agnelli's inner circle? Next came the purchase of 2.27 percent of Fiat shares.
The move was praised by patriarch Giovanni Agnelli and Fiat management. But more interestingly, there was no public opposition - not from Italians, international investors, authorities or politicians.
Fiat does not expect political interference from the USA, despite its current ties with General Motors. Agnelli said the Libyans have "demonstrated a desire to distance themselves from certain forms of dangerous radicalism."
But GM spokesman Stefan Weinmann said: "LAFICO is on the list of Specially Designated Nationals maintained by the Office of Foreign Asset Control of the US State Department, which means that GM may not trade with this company.
"We don't believe that LAFICO's investment in Fiat SpA would involve GM in any transaction with LAFICO," he added, "but we will continue to monitor the relationship."
In March 2000, GM paid $2.4 billion for a 20 percent stake in Fiat Auto.
Still, since the financial community doesn't seem to oppose a return of the Libyans among Fiat's leading shareholders, the next step could be a new, dedicated capital increase.
As in 1976, Fiat could easily raise between E1.5 billion and E2.5 billion and give LAFICO 10 to 15 percent of the shares.
Fiat's debt problem would be erased. And the Agnellis would keep firm control of Fiat. Their current 30 percent of voting shares will be diluted by a capital increase. But the Libyans are again expected to act as close allies.
Combining the 30 percent owned by the family holding companies with the shares of their current allies, the Agnellis today can count on almost 40 percent of Fiat voting capital. Adding new shares issued for the Libyan group would push the Agnelli's control to over 50 percent. That would provide a measure of safety, as Fiat shares recently fell to a 10-year low, lowering the market capitalization to just E8.8 billion.
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