The Agnelli family gave Fiat a timely boost this morning when it was confirmed that they intend to remain the conglomerate's majority shareholders for the foreseeable future.

Gianluigi Gabetti, the Chairman of the Agnelli family holding companies, Ifil, Ifi, and Giovanni Agnelli & Co, told the Italian national daily newspaper Corriere della Sera this morning that they were still fully committed to the century old carmaker's future, despite the dilution of their shareholding which will take place when the consortium of creditor banks convert a 3 billion euro loan into stock on its expiry in September.

There has been widespread speculation regarding the Agnelli family's intentions since the consortium of banks, led by Banca Intesa, Capitalia, SanPaolo IMI and Unicredito Italiano, agreed terms to convert the loan, which was issued in 2002, into a substantial Fiat Group shareholding, during a three hour meeting with Fiat Group Chairman Luca di Montezemolo and CEO Sergio Marchionne, which took place earlier this week.

"We still won't have thirty percent," Gabetti told Corriere della Sera. "We're not counting it out. For certain, in September the banks will take over. And certainly we'll see with what effective shares, but there will be a dilution of Ifil participation."

Gabetti, who worked closely with Gianni and Umberto Agnelli for many years, remains tied into the inner circle of the Agnelli family. "The goal is that of guaranteeing stability to the company and its management, in which we have full and total confidence," he added. "Therefore, I repeat again, we are determined to remain in our role as majority shareholders in the future. We will continue to do so. And we will continue to try to deserve it."
 

He added that he was highly satisfied with the recent outcome of the negotiations with the creditors banks, and that the firm's ongoing recovery strategy met with his full approval. "I'm very satisfied. Above all because I'm fully confident of the efforts being made by Luca Cordero di Montezemolo and Sergio Marchionne. And I'm full of confidence that we'll see good results," Gabetti concluded.

The news was favourably greeted by the stockmarkets which pushed Fiat's ordinary share price up by 3.5 pct in early trading, it eventually closing up 0.55 pct at 5.14 euros on the Bourse Italia. With speculation suggesting that the Agnellis will have to convert preferential shares to avoid the dilution of their stake, Fiat's preferred shares rose by as much as 4.2 pct today, before closing up 0.31 pct at 4.26 euros.

FIAT Q1 WILL BE 'BETTER THAN EXPECTED'

Well placed Italian sources report that Fiat's first quarter operating results, due to be announced on 10th May, 'will not be sensational', but will however, 'be better than many people are expecting'.

The whole European new car market has been hammered in recent months, with most brands reporting sales slumps. Fiat have themselves not escaped the decline, but continuing strong growth of the light commercial vehicle sector, together with higher profit margins, and a better mix of models, mean that the blow will be somewhat cushioned.