Chrysler 2004 Annual Report Download - page 128

FIAT GROUP
02
126
■Call Option of Teksid with Norsk Hydro on the 49% holding (exercisable whenever Norsk Hydro renounces its right to exercise the
Put Option described above): the sale price would be the higher value between the initial investment made by Norsk Hydro in
1998, calculated according to the criteria expressed previously, and 140% of the Fair Market Value (in this regard, an increase of
2% per year is established in the event the option is exercised from the start of 2008 until 2013, thus up to 150% of the relative
value).
It should be pointed out that so far the conditions that would give rise to the strategic deadlock are considered to be quite remote.
Fiat S.p.A. is subject to a put contract with Renault (in reference to the original investment of 33.5% in Teksid, now 19.52%).
In particular, Renault would acquire the right to exercise a sale option on the treasury stock to Fiat, in the following cases:
■in the event of nonfulfilment in the application of the protocol of the agreement and admission to receivership or any other
redressment procedure;
■in the event Renault’s investment in Teksid falls below 15% or Teksid decides to invest in a structural manner outside the foundry
sector;
■should Fiat be the object of the acquisition of control by another car manufacturer.
The exercise price of the option is established as follows:
■for 6.5% of the capital stock of Teksid, the initial investment price increased pro rata temporis;
■for the remaining amount of capital stock of Teksid, the share of the accounting net equity at the exercise date.
End-of-life vehicles
In September 2000, the European Union issued Directive 2000/53/CE relative to end-of-life vehicles. This Directive, among other
things, provides that, in the future, vehicle manufacturers will have to bear all, or a significant part of, the costs arising from the
collection, treatment and recovery of end-of-life vehicles. The above Directive is currently being introduced into the national
legislation of the individual member states and will be applicable for all vehicles placed on the market starting from July 2002;
beginning January 2007 all vehicles on the market will be covered, even those placed before July 2002. The Directive was introduced
in Italy in June 2003 and in the major markets (Germany, the Netherlands, Belgium, France, Spain, Slovenia, Portugal, Austria and
Norway). Fiat Auto is pursuing a strategy aimed at zero service cost for the manufacturer by promoting networks for the disposal of
the vehicles or taking part in networks set up by other competitors, which, in the majority of cases, is made possible by the creation
of a process that is economically self-sustained by the recovery value of the spare parts. Consequently, no liabilities are recognized
for the Group.
Group assets held by third parties
Group assets held by third parties amount to 3,218 million euros at December 31, 2004 (4,496 million euros at December 31, 2003), a
decrease of 1,278 million euros from December 31, 2003. They include securities deposited with banks and other financial institutions
totaling 156 million euros (1,042 million euros at December 31, 2003). The reduction of 886 million euros of the amount of securities
deposited with banks is mainly due to their redemption at maturity by the issuers. This item also includes tangible fixed assets,
products and goods of some Automotive Sectors held by outside suppliers for processing totaling 3,062 million euros (3,454 million
euros at December 31, 2003).