Chrysler 2010 Annual Report Download - page 356

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In addition:
in 2005, Fiat S.p.A. provided guarantees on credit facilities in local currency, equivalent to approximately €58 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 2010 (as also at 31 December 2009) these
credit facilities were unutilized;
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
During 2010, Fiat S.p.A. did not enter into any agreements or contracts which resulted in the assumption of significant new commitments. The residual
commitment (€5,575 thousand at 31 December 2009), in the name and on behalf of Fiat S.p.A. and its subsidiaries under the sponsorship agreement signed
with Juventus Football Club S.p.A. in May 2007 for the 2007-2008, 2008-2009 and 2009-2010 seasons, was satisfied. Beginning with the 2008-2009
season, these sponsorship costs were borne by the subsidiary CNH Global N.V.
Teksid
Fiat S.p.A. is subject to a put option held by Renault (with reference to the original 33.5% investment in Teksid, now 15.2%).
In particular, Renault has the right to sell its interest in Teksid to Fiat in the event of:
a breach in application of the protocol agreement and admission to receivership or other administrative proceeding;
Renault’s investment in Teksid falling below 15% or Teksid deciding to make a significant strategic investment outside the foundry sector;
control of Fiat being acquired by another automaker.
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 2010, potential obligations relating to these indemnities were approximately €799
million (approximately €827 million at 31 December 2009), net of provisions set aside by individual companies. Certain other indemnities 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.