AM Online

Fiat's creditors woo GM

Creditor banks' plans to spin off Fiat Auto, together with suggestions of a reduced role for General Motors in a revamped restructuring package, may have gone some way to remove GM jitters – and stave off a potential lawsuit – over the put option.

According to a report in today's Financial Times, Fiat's creditor bank lawyers have been concerned that GM may seek legal action to prevent the put option, whereby it is required to buy the 80 per cent of Fiat Auto it doesn't already own, being exercised.

The paper says that the plans for spinning off the company are progressing. This would involve putting the business into a separate operating company which would receive some 2bn euro in cash from asset sales in the holding company.

And the creditor banks have also tabled new proposals which would allow GM to avoid the option in return for a smaller “but more immediate” cash contribution to Fiat's restructuring efforts, the report states.

GM chief executive Rick Wagoner says: “We need Fiat to get back on the right track, so we are anxious and trying to help them any way we can.”



If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.