Fiat announced this morning that it had agreed to sell a majority stake in its Iveco division's financing arm, a move that will allow it to deconsolidated around 2 billion euros of debt.

Barclays Asset and Sales Finance will now acquire 51 percent of Iveco Finance Holding for 96.8 million euros, with Iveco retaining the balance. This action follows a recent majority sale of CNH Global's European Finance Division, to BNP Paribas SA, and Fiat Auto's similar operation, Fidis, to a consortium of the Group's creditor banks.

Fiat are confident that Barclays' expertise in the financial services sector will allow Iveco to offer customers more competitive deals as the trucks to buses division which is expected to enjoy strong growth over the coming years.

FIAT SPA STATEMENT, 11.04.2005:

IVECO and Barclays Asset and Sales Finance have agreed to combine their respective strengths by creating IVECO Finance Holdings, a new venture that will provide commercial vehicle financing and leasing solutions to Iveco customers in France, Germany, Italy, Switzerland and the U.K.

Iveco will transfer certain of its financing subsidiaries to IVECO Finance Holdings. Barclays will then acquire a 51% controlling stake in such company for a consideration of €96.8m. IVECO will hold the remaining 49%. The proposed transaction is subject to the necessary regulatory approvals.

The purpose of IVECO Finance Holdings is to provide IVECO’s customers and dealers with competitive commercial vehicle financing by combining Barclays’ strength and competitiveness in the financing business with IVECO’s expertise in the research, development, design, manufacture and sales and marketing of commercial vehicles.

Barclays Asset and Sales Finance already has a strong presence in many of IVECO’s principal markets and IVECO Finance Holdings will provide opportunities for further expansion of existing operations as well as the development of new markets. It also serves Barclays strategic aim of developing retail and commercial banking activities in selected markets outside the UK.

The new company will maintain the operational and business structure of IVECO’s previous captive financing company. It will offer hire purchase, finance leasing and contract hire solutions to IVECO dealers, large fleets and retail customers in France, Germany, Italy, Switzerland and the United Kingdom.

As of 31 December 2004, IVECO Finance Holdings manages a fleet of 88,700 financed units, representing a managed outstanding in excess of €2 bn.

The commercial vehicle financing market is expected to grow at over twice the rate of Eurozone GDP over the medium term.

Paolo Monferino, the CEO of Iveco said, “IVECO Finance Holdings will allow IVECO’s financing business to become more competitive and will assist us in providing innovative solutions to increasingly sophisticated customer needs. It will enable an already successful business to be further developed by drawing on the balance sheet strength and asset finance expertise of Barclays.”

Stephen Price, Managing Director of Barclays Asset and Sales Finance commented: ”This is a great opportunity which combines the market presence and scale of a leading commercial vehicle manufacturer with the scale and resources of a global financial services provider. It will accelerate the development of the Barclays Asset and Sales Finance business in Europe by giving us a significant presence in a number of new markets and the ability to work with an acknowledged industry leader in the commercial vehicle sector.

Luigi Gubitosi, CFO of Fiat said: “We are pleased with this transaction as it further enhances IVECO’s strong commercial offer to its dealers and customers, while freeing approximately €2bn of financial resources which will further strengthen the Group’s liquidity”.