Fiat denies talks with banks on capital issue
Auto giant Fiat denied media reports that it was in talks with banks about a capital increase.
MILAN - Italian auto giant Fiat denied media reports on Friday that it was in talks with banks about a possible capital increase, after the carmaker s shares were hit hard during morning trading.
Regarding reports "about alleged Fiat s ongoing talks with banks regarding a proposed share capital increase," the company "states there is no specific project in such respect and believes that there is no need for a capital increase," it said in a statement.
Italy s Il Messaggero newspaper had said the group was in talks with four banks about a possible capital increase to buy the 41.5 percent of US carmaker Chrysler that Fiat does not already own.
The capital increase would be worth between one and two billion euros ($1.3 to $2.6 billion), the report said.
Fiat was forced to suspend trading for more than half an hour after its shares slumped by 5.13 percent in reaction to the rumour. At 1150 GMT, Fiat s share price was down by 2.7 percent at 3.60 euros, while the FTSE Mib index on which they trade was flat overall.
Fiat already owns 58.5 percent of Chrysler.
The Italian carmaker saved its US partner from bankruptcy in 2008. It has been sheltered somewhat from the economic downturn and a slump in the European car market by strong Chrysler sales in North America.
