|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Fiat misses breakeven target
MILAN, Italy (Reuters) -- Fiat Chairman Paolo Fresco confirmed the ailing industrial group was considering splitting up its businesses on Monday and said its main carmaker unit had missed a target to break even for the fourth quarter of 2002. Fresco shed no more light on how a spin-off would work or be financed, questions that have rattled the market since news broke that Fiat's profitable businesses could be freed from the burden of cash-bleeding Fiat Auto. Fiat Auto made an operating loss of "less than 200 million euros'' in the fourth quarter, taking its full-year loss to 1.3-1.4 billion euros. Fresco told a meeting of top managers that the group was studying "various plans to recapitalise our core businesses, starting with Fiat Auto but not only Fiat Auto.'' "It is true spin-offs are being considered but only in order to bring more financial resources into the businesses so that they can increase their plans,'' Fiat quoted Fresco as saying. Various recapitalisation plans have been floated recently but uncertainty as to how much cash Fiat Auto needs and where it would come from pushed its stock 5.5 percent lower on Monday. Earlier this month, financial sources said Fiat's creditors and controlling Agnelli family had invited financier Emilio Gnutti to join their plan for Fiat, which would include spinning off Fiat Auto and recapitalising it by up to five billion euros. Meanwhile, Gnutti's erstwhile ally, Roberto Colaninno, has offered to pump money into Fiat in return for the CEO seat and a free hand to sell more assets to raise cash for the sputtering car unit, whose slumping sales have infected the whole group. Umberto Agnelli, the head of the holding companies that control the energy-to-insurance conglomerate, has said the heirs of Fiat's founder would support any capital increase while Industry Minister Antonio Marzano said it was unlikely the state would take a stake in Fiat. DECISION TIMEThe Agnellis are due to meet on Friday to discuss the way ahead for Fiat Auto, which was recapitalised on paper twice last year to comply with Italian corporate law -- once via an equity swap and then by cancelling intra-group loans. Investors say the maker of the Punto and Alfa Romeo Spider needs more cash in hand to invest in new models, not just sort its finances out. Under its current plan, Fiat will invest 2.6 billion euros a year to revive its flagging car line-up. A slump in auto sales, partly due to a strategy of squeezing more profit out of each car, forced Fiat into a debt-slashing restructuring last year, including more than 15,000 job cuts and a rush of asset sales. Fiat reiterated it had cut its net debt to under three billion euros, a target set by its powerful creditors whose three billion euro loan is worth almost double the Agnelli's 34 percent stake in the company at current market prices. Financial sources say the banks want to split Fiat Auto away from the rest of the group while media have reported Fiat's profitable sportscar arm Ferrari or truckmaker Iveco could be merged with Fiat Auto. The car unit would then be recapitalised, possibly with a contribution from General Motors Corp. which owns 20 percent of the carmaker and whose managers met Fresco last week. Fiat has a "put'' option to force GM to buy the other 80 percent from next year and some papers have said Fiat could offer to cancel the option in return for new cash. Fiat Auto's operating losses have been shrinking on a quarter to quarter basis but a 200 million euro loss in the fourth quarter would take its full-year loss to 1.4 billion euros, up from the previous forecast of 1.2 billion euros and some 2.5 times the 549 million-euro loss notched up in 2001. Fresco said the group needed to work harder to meet its targets but said: "I am convinced we will start to see the light at the end of the tunnel from 2003 but mainly in 2004 the group will be able to set off on a path of great growth.''
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
