As their share price continues to steadily rise in significant volume trading, the Fiat Group have stated that they possess no information relating to the attention-focused Auto Division that could have an influence on these unfolding events.

The share price has been in ascendancy for sometime now, in fact it is up by more that 28 pct in two months. This morning's trading in Fiat shares on the Milan bourse saw the share price hit 7.45 euros, while by mid-afternoon more than 40 million shares had been exchanged, to a value of more than 301 million euros - 5 pct of the company's total value. A year high of 7.59 euros was achieved yesterday.

The share price rise has been given a real fillip by a much better than expected second quarter financial performance from the group last month, and earlier during August, CEO Sergio Marchionne's latest business plan which calls for an ambitious programme of new model launches. The markets feel that Marchionne is the right man for the job, and that the Italian-Canadian is making headway in this quest to turn the fortunes of the loss-making Auto Division around swiftly.

Another factor steaming to attention is the date next month when Fiat's creditor banks turn a 3 billion euro loan into equity, an event which will significantly change the shareholder structure. Fiat's current majority shareholder IFIL - the Agnelli family's investment vehicle - have denied buying shares ahead of the conversion. IFIL currently hold a 30 pct stake in Fiat and have recently reaffirmed their commitment to being the majority shareholder, although as things stand next month their stake will drop to 22 pct while the banks will hold around 26-28 pct.

Another significant milestone next month will be the launch of the new Grande Punto at the Frankfurt IAA. It will be arguably Fiat's most important model release for more than a decade - and a car that they are pinning much of their recovery hopes on. It is being eagerly awaited by dealers and investors alike, and certainly the initial signs are that it will be a serious segment contender.
 

Giant brokerage house Salomon Smith Barney have this morning re-rated Fiat shares - the latest influential financial institution to do so - as a buy up to 8 euros (currently the firm's target is 6 euros) saying that the "upside may be greater than downside at this point, but still a share for the brave."

In response to all this activity, and at the behest of an enquiry to clarify matters made by the Italian stockmarket watchdog, Fiat issued a statement. "Upon request by Consob, made in connection with the performance and the significant volumes of Fiat shares that are being traded on the stock exchange, Fiat hereby reports that it has no elements to explain nor does it possess information on new significant events that could have an influence on said performance." It read, before continuing, "In connection with the maturity and related fulfillments regarding the mandatory convertible loan, the Company will resolve on a 3-billion-euro capital increase (capital and share premium) at its next Board of Directors’ Meeting on September 15, 2005.

"The issue price will be equal to the arithmetical average between 14.4409 euros (deriving from the price of 15.50 euros contractually defined and adjusted following the capital increase of July 2003) and the weighted average of the official prices posted on the Mercato Telematico Azionario (Borsa Italiana’s Electronic Equity Market) over the last six months. The financing banks will subscribe the new shares on September 20 through a set-off of the principal resulting from the aforementioned loan, pursuant to Article 2441, paragraph seven of the Italian Civil Code, with the obligation to offer the shares pre-emptively to holders of Fiat ordinary, preference and savings shares," the statement concluded.