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Agnelli hopes never to sell to GM
GENEVA, Switzerland (Reuters) -- Fiat's new chairman said he did not expect to exercise a put option to sell most of Fiat Auto to General Motors Corp. soon, just hours before a meeting on Thursday meeting with his counterparts at the U.S. firm. The option, negotiated between Fiat and GM in 2000 as part of a wider industrial alliance, could force GM to buy the remaining 80 percent of Fiat Auto it does not already own as soon as next year. "I do not think we will exercise the put in the near term and we hope never to exercise it," Umberto Agnelli told reporters on the sidelines of the Geneva Auto Show. Agnelli also said he hoped to convince GM to participate in a planned five billion euro recapitalisation of Fiat Auto, but that he was not sure they would do so. "It very much depends on GM's financial situation," he said. "I hope to convince them to participate in the recapitalisation but it's not certain that they will." Agnelli is to meet GM CEO Richard Wagoner and its chief financial officer later on Thursday -- his first get-together with his GM counterparts since he was named Fiat's chairman on Friday. "What interests me is working together on an industrial programme," he said. At 0900 GMT, Fiat shares were down 0.9 percent at 6.66 euros, just off fresh lows since 1985 touched on Wednesday and underperforming the DJ Stoxx European auto index. Fiat shares are down 56 percent over the last 12 months, the worst performer in the sector. The meeting comes at a sensitive time for Fiat, which on Wednesday lost its last investment grade rating as Standard & Poor's cut Fiat's short-term rating to "junk" and started coverage of its long-term debt with a speculative grade rating of BB+. Agnelli took over the chairman's job on Friday as the automaker announced that capital losses on asset sales and a costly job-slashing restructuring had dragged Fiat -- Italy's largest private employer -- to a record net loss of 4.26 billion euros ($4.67 billion) last year. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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