At the same time as the Fiat Group was announcing its
second quarter and half year financial results this
morning the board of directors also confirmed that they
have approved the plans that will finally see the more
than century old business split up, separating away the
automotive manufacturing activities and leaving a
disparate rump of industrial divisions including CNH
Global and Iveco.
The
following press released was issued by the Fiat Group in
Turin this morning:
"On April 21 2010 Fiat S.p.A announced its intention to
separate its capital goods businesses by way of a
demerger. Today its Board of Directors approved a
partial and proportional demerger pursuant to art. 2506
and ff. of the Italian Civil Code whereby Fiat S.p.A.
intends to transfer to a newly incorporated company,
Fiat Industrial S.p.A. certain assets (mainly
shareholdings) in the truck, industrial & marine
powertrain, agricultural and construction equipment
businesses, as well as liabilities (financial debt). As
a result of the Demerger, such businesses will be
separated from the car business and relating components,
which include Fiat Group Automobiles, Ferrari, Maserati,
Magneti Marelli, Teksid, Comau and FPT Powertrain
Technologies (passenger & commercial vehicles powertrain
business).
"As of the
Demerger date - expected to be January 1, 2011 - shares
of Fiat Industrial will be assigned to Fiat shareholders
on a one to one ratio. After the Demerger Fiat and Fiat
Industrial will be separately listed on the Milan Stock
Exchange and will operate as independent separately
listed companies with their own management teams and
boards of directors. The Demerger will provide strategic
and financial clarity to both businesses and enable them
to strategically develop independently of each other.
Additionally, the Board believes that the transaction
would allow for the proper valuation in the capital
markets of these two businesses. The Demerger will be
fully proportional (i.e., each shareholder will
receive a number of shares of the same class equal to
the number of shares of such class held in Fiat at the
completion date of the Demerger) and therefore as of the
Demerger date the shareholders of Fiat Industrial will
be the same shareholders of Fiat.
"As a result of
the Demerger the Total Equity of Fiat will be reduced by
euro 3,750,346,053; such reduction (achieved through a
correspondent reduction of the share capital and the
other reserves) will not cause the cancellation of any
shares but will result in a proportional decrease of the
nominal value of each class of shares that, after the
Demerger date, will be equal to euro 3.50. Consequently,
the share capital of Fiat Industrial will be increased
by euro 1,913,178,892 and euro 1,837,167,161 will be
attributed through the other reserves. The number and
classes of shares – and their rights - of Fiat
Industrial will mirror exactly the number and classes
and rights of shares of Fiat S.p.A. The nominal value of
each class of shares of Fiat Industrial will be euro
1.50. These new provisions will become effective as of
the Demerger Date and therefore will not apply with
respect to 2010 financial statements. As Fiat owns
treasury shares representing approximately 3% of Fiat
capital stock and such shares will not be transferred to
Fiat Industrial, after the Demerger Fiat will also hold
approximately 3% of Fiat Industrial capital stock.
"No material
amendments will be made to Fiat existing incentive
plans, except for any reference or entitlement to
purchase or be granted Fiat S.p.A. shares which as a
result of the demerger, will be changed to a combination
of Fiat and Fiat Industrial shares; such plans will be
serviced through treasury shares and shares of Fiat
Industrial received pursuant to the Demerger.
"Completion of
the Demerger is subject to shareholders approval and
other regulatory approvals (Consob and Italian Stock
Exchange). The Board of Directors has authorized the
Chairman and the CEO of Fiat to call the ordinary and
extraordinary shareholders meeting to approve the
Demerger and some amendments to the current by-laws that
either arise from the Demerger (including the reduction
of the aggregate amount currently available for the
purchase of treasury shares) or are required by recently
enacted corporate law regulations. Considering Fiat’s
shareholders base, it is expected that such
shareholders’ meeting will be duly convened with a full
quorum on September 16, 2010. The Demerger will be made
at book value and will therefore have no effect on the
consolidated results of the Group or on the statutory
result of Fiat S.p.A. for the year ended December 31,
2010. No shareholder withdrawal rights will be triggered
as a result of the Demerger.
"Finally, Fiat
Industrial Group received a highly confident letter
jointly signed by Barclays Capital, BNP Paribas, Citi,
Crédit Agricole Corporate and Investment Bank,
IntesaSanpaolo S.p.A., Société Générale Corporate &
Investment Banking, The Royal Bank of Scotland plc, and
Unicredit Corporate Banking S.p.A. for a new facility of
up to euro 4 bn. (to be available as a combined of a
revolving credit facility and a term loan) which is
expected to be finalized before the Demerger date. Such
facility will serve for general corporate purposes and
working capital needs including the repayment after the
Demerger date by Fiat Industrial of intercompany
financing provided by Fiat up to and including the
Demerger date."
