The Angelli family's primary investment vehicle IFIL Group will propose Tata Group Chairman Ratan Tata as an independent Fiat Group director when the board meet on 3rd May. Late last month the Fiat Group board met in Turin and announced that it would be increasing the number of board members to 15, the majority of which (8) will be independents.

The IFIL Group, which currently holds around 5 billion euros of investments, is the largest single shareholder in the Fiat Group, and along with IFI, manages the Agnelli family's long-term shareholding in the historic Italian carmaker. As such they have been able to nominate three new names to join the board.

After signing an initial 'memorandum of Understanding' with Fiat last autumn, during March Tata Motors began distributing Fiat Auto cars in India, the first step of a wider co-operation agreement that is currently exploring collaboration in the areas of manufacturing, purchasing, research and development, and distribution. Tata Motors are believed to be discussing distributing their own product range in Europe through the Fiat Auto network.

Forbes yesterday quoted 'industry sources' as saying that "Tata is regarded as an independent board member because his Fiat links are weak and because he will provide a wider contribution based on his Asian knowledge." Ratan Tata is a full member of the Central Board of the Indian Central Bank and also sits on the advisory boards of several major multination companies, including JP Morgan. The other nominees to the Fiat Group board being proposed by IFIL are automotive consultant Roland Berger, and their own CEO Carlo Sant'Albano.

Meanwhile at the end of March the IFIL Group announced that it had closed 2005 with the best financial result in its history, partly as a result of extraordinary transactions, with consolidated profit coming in at € 1,090 million, a decisive increase over the profit of € 124 million reported in 2004. The change of € 966 million was basically due to the net improvement in the results of the Fiat group and the Sequana Capital group. The consolidated net financial position of the “Holdings System” at December 31, 2005 was a cash position of € 348 million.
 

This was a reduction of € 332 million compared to the cash position at the end of 2004 (€ 680 million) mainly as a result of the investments made in Fiat (-€ 580 million) and Sanpaolo IMI (-€ 263 million) and the net proceeds from the sale of La Rinascente (+€ 529 million).

The major event of 2005 for IFIL was the € 580 million investment in Fiat made in September. This transaction allowed IFIL to maintain its investment in Fiat unchanged, defending the value of its most important investment and ensuring the conditions necessary for management to bring to a close the work begun two years ago. "The signs that emerged during the course of the year," said IFIL in its annual statement, "such as the improvement in the industrial operations of Fiat Auto, the increase in market share thanks to the success of the new models, the reduction of indebtedness and the industrial agreements reached with leading international partners – confirm the soundness of the decisions made and reinforce confidence in the success of the current turnaround plan which management of the Group is conducting with full commitment, firmness and determination," the statement concluded.