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Italian govt. may take Fiat stake
Milan, Italy -- The Italian government may take a stake in Fiat's loss-making car business, according to reports on Thursday. Investment banker Guido Roberto Vitale has drawn up the latest plan to be touted as a possible solution for troubled Fiat. Reuters said on Wednesday Fiat was considering spinning off its car business. Fiat's stock has been buoyed by speculation -- later confirmed -- that Italian entrepreneur Robert Colaninno was penning a separate plan that would install him as chief executive and invest his own money in the ailing business. Vitale's plan would see the state taking 33.7 percent stake in a group, which would include Fiat Auto and Fiat's 56 percent stake in sports car group Ferrari. The government is likely to make the investment through an infrastructure company linked to the treasury. Vitale -- an independent investment banker who has worked with the family of Italian Prime Minister Silvio Berlusconi in the past -- and the government are keen to keep Fiat in Italian hands. "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," Il Sole quoted Vitale as saying. Vitale's survival plan for Fiat would see the shareholders of the company, which include Fiat's creditor banks and partner General Motors (GM), handing over 5 billion euros for the development of new cars. They would recover that once the business is floated, raising 1.55 billion euros. The government's stake in Fiat Auto would fall to 25 percent after the listing, with the Fiat group owning about 17 percent -- or less if it decided to get out of cars all together to focus on its publishing, energy and insurance businesses. Fiat's car business lost 1.2 billion euros in 2002 and the company plans to cut more than 8,000 jobs to reduce debts, as the company continues to lose market share. Fiat executives are due to meet creditor banks on Thursday. Reuters said 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. The FT said the banks' plan would pump 2 billion euros into Fiat Auto, raised from selling assets including aviation unit Fiat Avio. Fiat could then raise 2 billion euros via a share offer with the controlling Agnelli family playing their part. The Agnellis own 34 percent of Fiat, mostly through their Ifi and Ifil holding companies
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