Fiat Auto SpA increases stake to 44.61% in Fiat India

Our Corporate Bureau
27 June 2005

New Delhi: The board of directors of Fiat India Pvt today announced Fiat Auto SpAs'' increase in stake in Fiat India Pvt. Ltd. to 44.61 per cent from its current 19.44 per cent through an investment of over Rs200 crore. . Since 1998, FIAT has made investments of Rs2,200 crore in India, towards building its capacity and increasing infrastructure capabilities. The infusion of funds represents for Fiat India free cash flow needed for future investments, to repay debt, and restructure its dealer network to sustain its current operations.

Dr Paolo Castagna, the newly appointed, MD of Fiat India Pvt. Ltd. stated, "This decision from Fiat Auto SpA, shows, once again their commitment to the Indian operations. Now our clear objective is to ensure we achieve the required growth rates in the country by streamlining our operations and targeting our brand strategy at the premium end."

"Having identified our areas of focus, we aim to use the new strength of our balance sheet to improve our overall dealer network, enhance our customer service initiatives as per Fiat''s international standards, and increase internal cash flows for vital investments."

Post the infusion, Fiat India Private Limited will be fully capitalised with Fiat Auto SpA along with Fiat India Automobiles Pvt Ltd, together holding a total of 99.83 per cent while the stake of Premier Automobiles Limited will be diluted to 0.17 per cent.