THE FIAT GROUP IN

Significant Events occurring since the End of the Fiscal Year
and Business Outlook
The most important transactions undertaken by the Fiat Group
in the early months of 2002 are reviewed below:
❚ Fiat S.p.A. successfully completed a capital increase. About
99.5% of the shares being offered were subscribed, adding
over one billion euros to stockholders’ equity. This
transaction involved the issuance of 65,820,600 ordinary
Fiat shares at a price of 15.5 euros each (10.5 euros of
which representing an issue premium), ranking for dividends
as of January 1, 2001, carried out on the basis of three new
ordinary Fiat shares for every 25 ordinary, preference and/or
savings Fiat shares held.
Each of the new shares comes with a warrant, which can
be used in January 2007 to purchase additional ordinary
Fiat shares at 30 euros per share on the basis of four
warrants for each share. The issuer retains the right to opt
for a cash settlement.
❚ A five-year bond issue amounting to US$2.2 billion was
entirely placed with institutional investors. The bonds, which
were issued by the subsidiary Fiat Finance Luxembourg S.A.
and guaranteed by Fiat S.p.A., are convertible into about 32
million General Motors shares.
❚ In January 2002, CNH and Kobelco, the world’s fourth
largest producer of hydraulic excavators, signed the final
agreements needed to fully implement their alliance. This
alliance will give CNH full access to the Asian markets and
strengthen its position in the construction equipment
markets of North America and Asia.
❚ In January 2002, following agreements concluded with the
Renault Group that provided for the transfer to the Iveco
Sector of full ownership of Irisbus Holding, Iveco purchased
an additional 15% interest in it, increasing its stake in the
company to 65%.
❚ Consistent with its strategy of divesting its components
businesses, Fiat entered into an agreement with Interbanca
and RGZ to establish Concordia Finance S.A., a company
owned 45% by RGZ, 25% by Interbanca and 30% by Fiat.
The new company will continue to distribute automotive
spare parts under the Magneti Marelli brand, having bought
the product portfolio currently belonging to Magneti Marelli
After Market S.p.A.
This transaction, which was valued at approximately 80
million euros, will generate proceeds of about 70 million
euros for Fiat, after deducting its investment in Concordia
Finance.
❚ Fiat is the general contractor for the Italian High-Speed
Railway Project. On March 4, 2002, work began on the first
87 kilometers of the Milan-Turin line. The project schedule
calls for completion of the Turin-Novara portion of the line
in time for the 2006 Winter Olympics. This project includes
the construction of the railway line, valued at 2,747 million
euros, and the upgrading of the existing infrastructure,
at a cost of 1,400 million euros.
❚ Fiat launched the following new products during the first
quarter of 2002:
– On January 30, 2002, Iveco introduced the Stralis, a new
heavy-range commercial vehicle. The most innovative
part of the Stralis is its Active Space cab, which offers a
better working environment, increased safety, improved
on-board living conditions and a modular design. The
new truck is available with an expanded range of engines,
which now includes the 540 CV Cursor13 powerplant.
The introduction of this new vehicle is the culmination
of a program implemented by Iveco since 1998 to
revamp its line of heavy road vehicles.
– Fiat Auto launched the new Alfa 156 and Alfa Sportwagon.
Both are available with several engines, including one
with a direct-injection gasoline system that delivers better
performance and fuel economy. In addition, the Alfa 156 line
was rounded out with the addition of two high-performance
models: the Alfa 156 GTA and the Sportwagon GTA.
– The new Fiat Ducato, which has been redesigned with
a totally new front and a cab that combines exceptional
roominess and ride comfort, was introduced early in
February 2002.
Information on the business outlook for the balance of the
year is provided in the Overview.
Report on Operations – Significant Events occurring since the End of the Fiscal Year and Business Outlook 39
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