Fiat's share price has bounced back over the psychological five euro threshold as the stock markets express confidence that the carmaker has successfully concluded negotiations over its looming three billion euro loan.

This news came onto top of a recent one million euro share purchase by a group of Fiat senior managers, and the expectation that a major new Indian manufacturing alliance is imminent.

FIAT MANAGEMENT SHARE PURCHASE

Following hard on the heels of Group CEO Sergio Marchionne's decision to purchase of 220,000 Fiat shares, came the news that a group of around thirty five senior managers had taken advantage of the firm's falling share price to snap up over one million euros worth of stock.

Fiat confirmed the action with the following brief statement: "The members of the Fiat Auto Steering Committee and managers of Fiat S.p.A. and the operating Sectors who directly report to the Chief Executive Officer of the Fiat Group, Sergio Marchionne, have bought today Fiat ordinary shares on the market for a total amount of more than one million euros."

FIAT COME TO AGREEMENT WITH CREDITOR BANKS

Fiat's share price received a further fillip this week with the official news that the quartet of commercial banks, which three years ago loaned the carmaker three billion euros, had come to agreement over converting this loan, due to expire in September, into full shares, a move which would immediately place them as influential shareholders. The markets were delighted that the looming uncertainty over this issue had been successfully resolved and that the banks had resisted any moves to break the group up.

Fiat issued a statement following the three hour meeting: "Luca Cordero di Montezemolo, Chairman of Fiat, and Sergio Marchionne, Chief Executive Officer, have met today in Milan with the representatives of the main lending banks that in 2002 had provided the 3-billion-euro mandatory convertible facility to Fiat. The banks were represented by the Chief Executive Officers of the companies: Corrado Passera (Banca Intesa), Matteo Arpe (Capitalia), Alfonso Iozzo (SanPaolo IMI) and Alessandro Profumo (Unicredito Italiano).
 

"During the meeting the operating and financial data of the Group was confirmed. Fiat has reiterated its commitment to achieving the objectives stated for 2005, 2006 and 2007. The conversion of the mandatory convertible facility, due in September 2005, was confirmed. The Banks also reaffirmed their will to support the Group which is focused in achieving the financial objectives set for the next three years," the statement concluded.

'MAJOR' NEW INDIAN DEAL IMMINENT

Rumours which have been swirling over the last week suggesting that Fiat is close to signing a major new car manufacturing alliance with ambitious Indian firm Tata Motors, was given strong credibility when Group Chairman Luca di Montezemolo hinted to reporters that a 'big announcement' concerning India could arrive in a matter of weeks.

CEO Marchionne is known to have been recently locked in talks which aim to re-launch car Fiat's stalled Indian operations, and the news that Tata Motors, part of the Tata Group, India's biggest private sector grouping, may be involved has impressed market analysts.

NEW PLAN FOR TERMINI IMERESE PLANT PRESENTED

Meanwhile this week has seen Fiat and the Sicilian regional government finally present concrete proposals for the threatened Termini Imerese factory, which went once again onto state-subsidised shutdown on 21st March.

Currently home to Italy's best selling car, the Fiat Punto, the new plans call for 30.750 million euros to be invested in new infrastructure and workforce re-training to turn the plant into a production centre for the Lancia Ypsilon model, with a daily build rate of 400 units being targeted. A core workforce of 1,343 is envisioned, meaning a loss of around 120 jobs, when the new model begins rolling out of the factory, scheduled for September.