Fiat
has flatly denied Italian media reports this morning that it
was seeking a multi-billion euro capital increase to fund a
merger or acquisition after a turbulent day on the
stockmarket that saw its shares suspended by the bourse
prior to the confirmation.
La
Repubblica and Il Sole 24 Ore both contained
reports this morning that centred around a raising of
capital to fund a potential bid for French carmaker PSA
Peugeot-Citroën. The papers claimed that the Agnelli family
(which controls 30 pct of Fiat stock) was mulling raising
billions in funding to maintain their stake in an enlarged
entity, and that Fiat had already approached several Italian
banks.
Coupled with the sharp drop in fourth quarter profits that
was revealed when the Fiat Group unveiled its Fourth Quarter
and Full Year 2008 financial report late this morning, the
Turinese firm's share price was pressurised downwards.
Simone Migliarino, Fiat communications chief issued a brief
sentence denying the stories. "Comments published in an
Italian newspaper earlier today concerning a possible
capital increase by Fiat are entirely unfounded," he said in
the statement.
The
shares were suspended on the Milan bourse and Fiat was
obliged to respond with a hastily issued statement: "At the
request of Consob, Fiat clarifies that, except as already
stated in the announcement issued on January 20th, no
capital increase is being considered in relation to M&A
transactions with other groups in the automotive sector,
neither is external financing being sought for such a
transaction," read the statement. "It is a known fact that,
in the normal course of business, the Group – as is true for
other groups in the sector – frequently examines
opportunities for agreements of various types which would
offer it operational synergies and access to new markets. In
relation to comments published today, the Company reserves
the right to pursue any form of legal protection which may
be necessary."
Also
during the turbulent afternoon Fiat Group announced that
they would review Fiat CEO Sergio Marchionne's remuneration
package. "At the proposal of the Compensation Committee,
Fiat S.p.A.’s Board of Directors today reviewed the
effectiveness of the existing incentives for the retention
of the Chief Executive Officer, Sergio Marchionne, in light
of the particularly difficult and uncertain period currently
being faced by the automotive sector globally and the
performance of financial markets," read the statement. "The
Board believes it to be significantly in the Group’s
interests to adopt amendments to the Chief Executive’s 2004
Stock Option Plan in order to regain and extend the
retention ability of the plan – significantly diminished by
extraordinary events wholly independent of management’s
performance – through the reintroduction of vesting
restrictions and extension of the exercise period. Under the
proposed amendments
