Chrysler 2005 Annual Report Download - page 50

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Report on Operations Transactions among Group Companies and with Related Parties
Significant Events Occurring since the End
of the Fiscal Year and Business Outlook
Significant Events Occurring since the End of the
Fiscal Year
The most significant transactions completed by the Fiat Group during
early 2006 are set out below:
On January 3, 2006, Fiat Auto and Severstal Auto announced
that they had signed an industrial agreement for the assembly in
Russia of Fiat Palio and Fiat Albea models based on CKDs
produced in Turkey by Tofas, the joint venture between Fiat Auto
and the Koç Group.The assembly will start in 2007 in the
Severstal Auto plant of NaberejniyeChelni near Kazan in the
Volga region. On February 8, Fiat Auto and Severstal extended
the reach of the industrial agreement to Fiat Doblò models
(which are also produced in Turkey), that will be assembled in
Russia in the same manner as the Fiat Palio and Fiat Albea
models.
On January13, 2006, the Fiat Group and Tata Motors Ltd.
announced, by means of a joint press release, that they had signed
an agreement to co-operate on dealer network sharing, which
covers the sale of Fiat branded cars in Tata outlets throughout
India. As a result of this agreement, a targeted selection of Fiat
cars and the complete Tata product range along with service and
sale of spare parts will be available from March 2006 through the
Tata dealership network. Dealers will display the new Fiat logo
alongside the Tata logo at their outlets.
Following its announcement on January 30, 2006, Fiat
communicated on February 10 that it had successfully closed its
offer to issue 6.625% Senior Notes having a face value of 1 billion
euros and maturing on February 15, 2013, whose price was set on
February 7, 2006 at face value.The Notes, which were issued by
Fiat Finance and Trade Ltd. Société Anonyme, a wholly-owned
subsidiary of Fiat S.p.A., have been admitted to listing on the Irish
Stock Exchange and were rated Ba3 by Moody’s Investors Service,
BB- by Standard & Poor’s Ratings Services and BB- by Fitch Ratings.
These ratings are in line with the agencies’ ratings of the Fiat
Group’slong-termdebt. In January2006, Fitch Ratings and Moody’s
changed their outlook on Fiat S.p.A. from negative to stable, as
Standard & Poor’s Rating Services had already done in August
2005.
On February 13, 2006, the Piedmont Region and the Fiat Group
announced bymeans of a joint press release a wide-ranging
cooperative program for hydrogen fuelled transport, as envisaged
in the protocol of intent signed at the end of December 2005.
Fiat and the Piedmont Region will cooperate on local and
European-level programs over the short, medium and long term.
They will promote the Piedmont Region as a key research and
development centre in this innovative area. Fiat will support these
initiatives by lending some of its internationally recognised experts,
including available resources at the Centro Ricerche Fiat in
Orbassano and at the Fiat Auto innovation facilities.
On February19, 2006, the Italian Ministry of Productive Activities,
Fiat Auto and Elasis (Fiat’s advanced research center
headquartered in Pomigliano d’Arco near Naples) signed a
contract for renewal of the Group’s Termini Imerese manufacturing
facility.The contract is part of a more general Program Agreement
drawn up with the government in December 2002, and follows
through on a project that Fiat Auto submitted to the Ministry and
Sicily’s regional administration in April 2004.The project will involve
action along two fronts.
In the first area, and in line with the Fiat development plan, the
project calls for industrial investments in the Termini Imerese plant
amounting to approximately 31 million euros to prepare the
Sicilian facility to produce the Lancia Ypsilon and the model’s
subsequent facelifts.
The second area of action is that of research and development,
where Elasis will work on improving the plant’s manufacturing
processes. Investments in this area will amount to approximately
13 million euros.
The Fiat Group has committed a total of 44 million euros to the
project. Public funding will amount to about 10 million euros, of
which 1.6 million euros has been provided bythe Sicilian regional
administration.
On February21, 2006, the Italian Ministry of Productive Activities,
Fiat Powertrain Italia, Fabbrica Motori Automobilistici (FMA), and