Electricite de France, Europe's biggest utility, has agreed to let Fiat reduce its stake in their energy venture as Italy's largest manufacturer seeks to slash debt by three billion euros ($2.8 billion) during 2002.
Electricite de France approved changes to the “shareholding structure” of Italenergia, Fiat said in a faxed statement. The partners are still discussing “details” with their four financial investors, Fiat said. As part of the change Fiat will sell fourteen percent of Italenergia to its biggest creditor, which are also partners in the power company, one of the banks said.
“It's an ideal solution” for Fiat, said Patrizio Pazzaglia, who manages 150 million euros at Bank Insinger de Beaufort NV. The energy business “is strategic and will be so in future. This bridge transaction will give them time to concentrate on the auto unit.”
The French State owned Electricite de France and Fiat created Italenergia a year ago and bought Italy's second largest power producer, Edison, for more than 8 billion euros.
Unprofitable Fiat needs to sell assets to reduce its 6.6 billion euros of net debt and meet conditions of a 3 billion euro rescue package arranged by the Italian banks while stemming losses at its car unit.