DECEMBER 21, 2002
Fiat and GM loosen ties
Fiat has sold its $1.1m share in General Motors in an effort to cut its debt load. The six percent shareholding in the world's biggest car maker is believed to have gone to the investment bank Merrill Lynch. The sale of the shares should not in theory have any effect on the option that Fiat has to force GM to buy the remaining 80% of subsidiary Fiat Auto in 2004 but the Americans are no longer very keen on the idea as the Italian car maker is losing a great deal of money and being stopped from restructuring by the Italian government.
The sale of the GM shares will help Fiat's cash-flow as it tries to bring down its massive debt load. This is good news for Ferrari as it will reduce pressure for Fiat to sell its shares in the luxury car and F1 company.
Fiat has also sold its customer financing subsidiary Fidis to a collection of creditor banks.
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