The Prospectus concerning the capital increase resolved by the Board of Directors on June 26, 2003, on the occasion of the presentation and approval of the Fiat Group Relaunch Plan has been filed with the Consob.

The transaction will start on Monday July 7, 2003 through the offering to stockholders of option rights to purchase 3 new ordinary shares every 5 Fiat shares of any class held, at a price of 5 euros each. The new shares shall be subscribed by July 30 and the option rights will be traded on the Stock Exchange from July 7 through July 22, 2003.

The capital increase is guaranteed by a pool of major Italian and international banks and will generate proceeds of about 1.8 billion euros.

The resources are designed to support the Relaunch Plan.

The Form 20-F was also filed with the SEC. The annual disclosure of this document is mandatory for foreign companies listed on the NYSE. It includes general considerations on the company situation, as required by legal prudence in compliance with applicable standards. 

FIAT SPA, TURIN: SALE OF FIAT AVIO TO AVIO SPA

Fiat S.p.A. and Avio Holding S.p.A., a company that is 70% owned by The Carlyle Group and 30% by Finmeccanica S.p.A., have signed an agreement for the sale of the aerospace activities of FiatAvio S.p.A., which will be contributed to the newly established company Avio S.p.A.

The aggregate enterprise value attributed to Avio S.p.A. is approximately 1,500 million euros.

The agreement is subject to certain conditions precedent, including the disbursement of financing and approval by the competent antitrust authorities. Once these conditions are satisfied, the deal should be closed by the end of the year, as expected.

This transaction will improve the financial position of the Group by about 1,400 million euros, for a net gain of about 700 million euros.

In this transaction Fiat has been advised by Lazard Co.

With its 14 plants, 9 research centers, and over 5,000 employees, FiatAvio generated 1,534 million euros in revenues in 2002, with operating income of 210 million euros.

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