Press release

IFIL - Board of Directors’ Meeting on March 28, 2003March 28, 2003

The Board of Directors of IFIL, which met today in Turin under the chairmanship of Gianluigi Gabetti, approved the consolidated financial statements and the draft statutory financial statements at December 31, 2002 of IFIL S.p.A. which will submitted to the Shareholders’ Meeting to be held in May.

As announced at the Board meeting on March 3, 2003, the consolidated loss for 2002 is € 367 million and is essentially due to the share of the loss (€ 429.5 million) of the Fiat Group, partly compensated by the contributions made by the Worms & Cie. Group (€ 98.1 million) and the Rinascente Group (€ 15.2 million).

At the end of 2002, the consolidated net debt of IFIL and its financial subsidiaries (the “holdings system”) amounted to € 484.4 million compared to € 323 million in 2001.

IFIL S.p.A.’s result for 2002 is a loss of € 516.4 million, due entirely to the writedown of the carrying values of the investments in Fiat and Club Méditerranée, as well as IFIL treasury stock

The Board of Directors voted not to propose a distribution of dividends to the Shareholders’ Meeting.

Significant events in 2002/2003

The major transactions during 2002 and 2003 can be summarized as follows:

·        the take-over bid for La Rinascente shares and the subsequent tender offer for the remaining shares, leading to the delisting of stock on the Italian Stock Exchange;

·        the buy-back of treasury stock by Worms & Cie. for about 10% of its capital, allowing IFIL to collect proceeds of some € 156 million and maintain its controlling interest in the French company;

·        the issue of three-year bonds for € 200 million which were assigned an “A” rating by Standard & Poor’s.

Future outlook and Reorganization Plan

IFIL’s work plan for 2003 is concentrated upon a process to strengthen and leverage its portfolio and centers around the Group Reorganization Plan.  Presented at the beginning of March 2003, the Plan calls for IFI’s contribution of the following investments against IFIL’s capital increase that is reserved for IFI:

·        Fiat S.p.A. (17.99% of ordinary capital stock and 18.96% of preferred capital stock);

·        Sanpaolo IMI (1.13% of ordinary capital stock);

·        Juventus Football Club (62.01%);

·        Soiem (50.1%).

 

The Reorganization Plan also calls for the conversion of IFIL savings shares into ordinary shares.  The contribution, submitted to the valuation of advisors, the expert appointed by the courts and the independent audit firm of Deloitte & Touche Italia S.p.A., will make it possible to raise IFIL’s solid equity and financial base, to strengthen its role as the operating holding company of the Group and, combined with the share conversion, to simplify its capital structure.  The Reorganization Plan will be submitted to the Extraordinary Shareholders’ Meeting convened in first call on April 23 and in second call on April 26.

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The present negative international economic scenario, exacerbated by the uncertainties surrounding the conflict in Iraq, is now making it even more difficult to advance forecasts on the consolidated result for the current year.  Nevertheless, the efforts made to turn around Fiat and the balanced portfolio of investments held by IFIL – less than one-third of which is concentrated in the automotive sector and over two-thirds diversified in banking, retail and tourism – constitute well-founded assumptions for a recovery of the Group’s growth.

As for 2003, on the basis of information available to date, IFIL S.p.A. is expected to report a profit.

 

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