The takeover of Chrysler is now a done deal. With a minimum outlay and the prospect of reducing debts, which are already sustainable today, with funding from the Department of Energy and the listing of the Detroit company at a market price of at least 7-8 billion. In short, the deal of the year will pass, at least in part, through Piazza Affari. Also because, as Sergio Marchionne writes to employees, "there are the conditions to speed up the integration project".
How much is the new Fiat-Chrysler worth? As of today, the question is highly topical among analysts in the automotive world who are redoing the accounts in the light of the lower costs for Chrysler's debt financing (350 million dollars already saved) waiting to do it again when the company will receive the longed-for funds at a subsidized rate (the request is for 3,2 billion dollars) from the Department of Energy, hitherto blocked due to Chrysler's debt to the Treasury. A goal that seems closer after President Obama himself hailed the news of the repayment of funds loaned to the Treasury as "a milestone" for the US auto industry. But the question is even more important for Fiat shareholders, grappling with a new company in terms of size and objectives. In a few months, probably less than six, the Lingotto group will in fact acquire, without further financial outlay, the 5 percent needed to complete the takeover of the US company to 51 percent. Once the absolute majority is achieved, there will be no obstacle to proceeding with the consolidation of Chrysler's results in Fiat's accounts. Indeed, the share already in the hands of Lingotto, since yesterday the relative majority shareholder of Chrysler with 46 percent of the capital against 45,7 still in the hands of the union, could already be sufficient. Without forgetting that, as announced in the press release released by Fiat, the Lingotto has an option on a 40 percent stake held by the syndicate to be exercised in half-yearly installments from next year to 2016. By the end of the year, however, Fiat will have the longed-for 51 per cent, which will already appear in the consolidated results at the end of 2011. In short, at the next spring assembly Marchionne will present a completely different Fiat, which in the space of a year or so has been turned upside down: from an (almost) all-rounder conglomerate, heir to the old Fiat with a thousand trades, to a focused group on the car, stronger in the two Americas than in old Europe, with some strengths among the emerging ones (Brazil, Turkey, Eastern Europe) and the critical mass to get back on top in China and Russia, the two current "holes" . In short, a group of 4 million cars, against the two million of Fiat alone, with a turnover which, as anticipated by the chairman John Philip Elkann, according to plans should rise to 100 billion in 2014, with 190 employees and 55 products new. In other words, a company which, in terms of size, can soar to the top in the Italian Stock Exchange's capitalization rankings. As if Eni federated with Total rather than Pirelli with Michelin. All without having unbalanced the financial structure. Indeed, Fiat, at the time of the "split" offloaded a large portion of the debt burden on its sister Industrial, Chrysler can complete its financial recovery with the listing on Wall Street by the end of 2011. Fortunately, there is no shortage of critical issues. Fiat's share of the European market fell by three percentage points during the years of the great crisis. And it will take time to attempt the ascent, even if the new models are finally on the way. The feeling, however, is that these difficulties have already been discounted in the price while the completion of the landing in Chrysler without having to sell assets or take on new debts wipes out more than one doubt. Sure, now it's time to invest. And it is possible that Marchionne and Exor will not choose to finance the development by cashing in with some sales.
SURPRISE: THE CAPITAL OF PALAZZO MARINO HAS SHRINKED
Even in the fiery atmosphere preceding next Sunday's ballot, no one had the audacity to accuse Lufthansa's top management of having hatched a plot against the outgoing mayor, Letizia Moratti, and Giuseppe Bonomi, president of the SEA, probably the most prestigious manager in the League area. Yet, five days after the vote, the decision of the German carrier to give up the hub in Lombardy, reducing Malpensa to a mere commercial appendix to the Frankfurt and Munich airports, is a low blow for the outgoing administration. First, because the IPO of the airport company was already accounted for in the junta's plans, which will now have to be renounced. Second, because the lost revenues for the SEA placement will make the confrontation even more bitter in the A2A house, where Lega and Compagnia delle Opere have been at loggerheads for some time. Among other things for the dividend policy: the chairman of the supervisory board, Graziano Tarantini, close to the CDO, is convinced that the company cannot still support a payout in the order of 90 percent of profits, under penalty of relapse on debts and investments. But the coupons of A2A, at the center of the duel for control of Edison, represent around 4 percent of Palazzo Marino's current revenue. To make the web of economic power even more complicated is the game of the Territorial Government Plan (to which the fate of the Ligresti group is linked), with a value of around 14 billion, which is intertwined with the Expo dossier. Lufthansa's blitz at Malpensa (the news tell us that the press release of the decision was circulated in Germany before informing the Milanese counterpart) therefore risks upsetting balances that have already been damaged for some time. Waiting for an agreement to be formed between Roberto Formigoni and the new mayor. And if it's not Moratti, Formigoni will easily get over it.
COMMERZBANK-UNDERSTANDING: 1-0
Corrado Passera can't rest. Of course, the economic situation seems to have been made on purpose to make the already not easy capital increase operation of the system bank more difficult. In short, one can also accept seeing the Ca' de Sass stock treated at a discount, but tolerate, on a day like today, that international investors give Commerzbank, engaged in a capital increase of 5,3 billion, a up close to 1 percent? It is true that the discount proposed for the securities of the German bank, ie 30 per cent, is higher than the albeit generous one, equal to 24 per cent, proposed by Intesa. But the objectives are completely different: Intesa aims to flesh out the assets to reach a Core Tier 1 of 9,8 percent. Commerzbank, on the other hand, raises cash to lighten part of the debt (16,2 billion, at an average cost of 9 percent) to the Berlin government forced to make a huge intervention to avert a huge crack. In short, on paper Intesa gives far more guarantees. But, alas, the label of "Italianness" does not help the former San Paolo bank, as Passera himself was able to personally ascertain in the road show, in which analysts and managers repeatedly said they were skeptical about the possibility that a bank so involved in the Italian economy may have growth prospects. Hence the decision to focus on a German bank, with a much more questionable past. Perhaps Crédit Agricole thinks the same as they, in view of the sale of the rights linked to the increase, went shopping in Greece, taking over the small Emporiki bank, on the verge of disaster.
S&P'S AX ON MEDIOBANCA
S&P' cut the outlook of four Italian banks: Intesa, Mediobanca, Bnl and Findomestic as a direct consequence of the cut on Italy's rating. The four banks, reads a note, "are heavily dependent on the domestic market and a downgrade of the Italian rating would result in a downgrade of the institutions mentioned"-
WALL STREET DOWN. GOLDMAN: OIL WILL RISE TO 130 DOLLARS
Still in red. Despite a good tone for most of the session, the Dow Jones reversed course in the end of the session, aided by concerns about Europe and disappointing economic data from the Midwest. Yet the index (closing at 12356,21 with a drop of 0,2%) had been able to count on the contribution of the energy sector (+1,3%) relaunched by a report by Goldman Sachs which raised the target of oil prices at $130 a barrel. The fate of the Nasdaq was similar (-0.46) while the S&P 500, thanks to energy stocks, limited losses to 0,09 percent. In New York the euro was traded at 1,41 against the dollar.
ASIA: TOYOTA STARTS AGAIN, DOWNWARDS DEBUT FOR GLENCORE (- 3%)
Nervous session, marked by bearishness, in the main Asian stock exchanges. The Nikkei 225, one hour after the closing was down by 0,4%, the Kospi of Seoul lost 1,1%, closely followed by Australia (-0,7). However, the auto sector is an exception, dragged up in Tokyo by the news, reported by the Nikkei Times, that Toyota expects to bring domestic production back to 90% of the levels prior to the March 11 earthquake within a month. The Hong Kong price list also fell slightly (-0,1%). On the other hand, a downward debut for Glencore International (-3n%) in Hong Kong, which was weighed down by the prospect of a drop in demand for raw materials from China. On the contrary, while remaining below the placement price (530p.), the stock had made a positive debut in London, setting a quotation at 525p (+2.14%). (ub)
