Fiat creditors beat off Agnelli coup

A threat by Fiat's creditor banks to back out of its agreed purchase of half of Fiat's car financing operations looks to have effectively blocked the appointment of Enrico Bondi as chief executive. It now looks as if Alessandro Barberis, currently Fiat's director general, will be appointed at the Fiat board meeting today.

The latest twist in the crisis to turn round Fiat's debt-ridden carmaking division came as the Agnelli family, who own 34 per cent of Fiat shares, tried to push through Bondi's appointment – which would effectively have put the cash-rich Mediobanco in charge of strategy. The move would also have imperilled the agreed restructuring plan.

The Italian Government is keen to keep Fiat in Italian hands – and is thought to be closely supporting the Mediobanco push for control as a way of blocking the possible sale of the ailing carmaker to GM in 2004.

The creditor banks' victory over the Agnellis – if it pans out today – could mean that Fiat chairman Paulo Fresco will stay on. Sources say Fresco intends to run Fiat until April.