COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES
SEARCH REDIFF

Fiat hikes stake in Ind Auto to 76 per cent

Fiat India Automobiles Limited has pumped in Rs 2.50 billion in its joint venture company -- Ind Auto Limited -- and hiked its holding in the venture from 51 per cent to 76 per cent.

Consequently, the company has rechristened the joint venture as Fiat IndAuto Limited.

Ind Auto is a joint venture between Fiat India and the Vinod Doshi-promoted Premier Automobiles Limited. The board of the joint venture company has also been reconstituted.

The new board has Vinod Doshi as chairman (non-operative), P Sighicelli as vice chairman (non-operative), G B Ravina as managing director, Maitreya Doshi as wholetime director and R Carli as member of the board.

Fiat already has the Foreign Investment Promotion Board approval to convert the joint venture into a wholly-owned subsidiary.

Fiat India has already pumped in Rs 2.50 billion into FIL as capital. The Rs 650 million equity structure of the 51-49 joint venture has thereby been raised to Rs 1.33 billion and the shareholding to 76-24.

The decision to hike its holding in the venture stems out of Fiat's plans to consolidate its car-making activities in India. Fiat has also decided that all its Project 178 operations, for the Siena and Palio range, will now be carried out by FIL.

The company will achieve optimum administrative and operating efficiencies at its Kurla plant in Bombay, which has a capacity to produce 50,000 units per annum.

Fiat India Automobiles Limited will remain the holding company for Fiat Auto SPA's administrative activities in India.

These include the development of the Ranjangaon plant, the scope of which remains to enhance the company's capacity to meet forecasts of future demand.

The FIPB had recently also permitted Fiat to increase its paid-up capital in FIAL by Rs 10.90 billion to Rs 20 billion.

In addition, Fiat had earlier also been allowed by the board to subscribe to Rs 1.06 billion worth preference shares in Ind Auto Limited, which if converted to equity, would hike up the Italian giant's stake from 51 per cent to 81.4 per cent.

Meanwhile, FIAL had last week launched special edition of its popular Uno -- the Uno Jubilee -- priced in the range of Rs 344,000.

Two variants of the special edition car have been introduced to mark the 100 years of Fiat's formation in Italy.

UNI

Business news