Chrysler 2009 Annual Report Download - page 328

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In addition:
in 2005, Fiat S.p.A. provided guarantees on credit facilities in local currency (equivalent to approximately €52 million) granted by Citibank to the Group’s
Indian subsidiaries New Holland Fiat (India) Private Ltd. and Comau India Private Limited. As at 31 December 2009 these credit facilities were unutilised;
in 2005, in relation to the early collection by Fiat Partecipazioni S.p.A. of the residual consideration for the sale of the aviation business, Fiat S.p.A. is jointly
and severally liable with Fiat Partecipazioni S.p.A. to the purchaser, Avio Holding S.p.A., should Fiat Partecipazioni S.p.A. fail to pay the compensation
(following either an arbitration award or an out-of-court settlement) provided for by the sales agreement signed with the seller in 2003. Similarly, in
connection with the sale of the controlling interest in the railway business, Fiat S.p.A. is liable to the purchaser, Alstom N.V., for any failure of the company
that sold the business (now Fiat Partecipazioni S.p.A.) to comply with the contractual compensation obligations.
Commitments
At 31 December 2009, commitments totalled €5,575 thousand and consisted of Fiat S.p.A.’s residual commitment under the sponsorship agreement
signed in May 2007 with Juventus Football Club S.p.A. in the name and on behalf of the Company and its subsidiaries for the 2007-2008, 2008-2009 and
2009-2010 seasons. Beginning with the 2008-2009 season these sponsorship costs are to be borne by the subsidiary CNH Global N.V.
The decrease of €24,071 thousand over the previous year is the result of the transfer of certain multi-year sponsorship agreements connected with the FIAT
trademark, with effect from the beginning of 2009, to the subsidiary Fiat Group Marketing & Corporate Communication S.p.A. following the sale of the brand
at the end of 2008 and the corresponding elimination of the commitments.
Teksid
Fiat S.p.A. is subject to a put contract with Renault (in reference to the original investment of 33.5% in Teksid, now 15.2%).
In particular, Renault would acquire the right to exercise a sale option to Fiat on its interest in Teksid, in the following cases:
in the event of non-fulfilment 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 structurally 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 the original 6.5% of the share capital of Teksid, the initial investment price increased by a given interest rate;
for the remaining amount of share capital of Teksid, the share of the accounting net equity at the exercise date.
Contingent liabilities
In connection with significant asset divestitures carried out in prior years, Fiat S.p.A. directly or indirectly through its subsidiaries provided indemnities to
purchasers with the maximum amount of potential liability under these contracts generally capped at a percentage of the purchase price. These liabilities
primarily relate to liabilities potentially arising from a breach of representations and warranties under these contracts and, in certain instances, environmental
or tax matters, generally for a limited period of time. At 31 December 2009, potential obligations with respect to these indemnities are approximately €827
million (approximately €816 million at 31 December 2008), net of provisions set aside by the single companies. Certain other indemnifications have been
provided that do not limit potential payment and, as such, it is not possible to estimate the maximum potential future payments that could result from claims
made under these indemnities.
Certain claims for damages are still pending against Fiat S.p.A. Given this fact and the specific conditions of the related proceedings, the possible outcome
of this situation cannot be reasonably estimated and, therefore, the likelihood of any costs to be borne by the company cannot be determined.