News June 5 2006
Fiat wants Ferrari back
Fiat wants to buy back an interest in Ferrari it sold to Mediobanca in 2002. Fiat originally sold 34% of Ferrari to the bank, which then on sold 5% to Abu Dhabi's investment vehicle, the Mubadala Development Company, and Fiat is looking to retrieve the remaining 29% Mediobance stake.
Ferrari is important to Fiat both as a strong brand in its own right and as a research and development resource for the rest of the group, which includes Alfa Romeo, Lancia and Maserati as well as Fiat cars.
Fiat had to sell the stake in 2002 because it had to refinance its troubled car manufacturing arm, which had lost €8bn between 2001 and 2004. Since then Fiat has continued to refinance, has cut costs (12,000 jobs have gone, predominantly on the Fiat Auto side of the business) and - most importantly - has returned to profit, reporting a €1.2bn profit in 2005.
Fiat has an option to buy back the Mediobanca stake in Ferrari which expires at the end of June.
© italiancar.com.au 05/06/06
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