Libya to Sell 15.9% Share in Italian Auto Company
Libya has agreed to sell its 15.9% stake in Fiat, Italy’s largest auto maker and private employer, the Italian defense minister said today.
Fiat’s stock rose nearly 4% after Italian Defense Minister Giovanni Spadolini said that the Libyan Arab Foreign Investment Co., known as LAFICO, was selling its interest.
Spadolini said the agreement was “mutual,” but offered no other details.
The Libyan share has been a thorny problem for Fiat because of rising political tensions between Italy and the government of Col. Moammar Kadafi following stepped-up hostilities between the United States and Libya.
The Libyan shares also have been a stumbling block for Fiat in its bid to participate in the American space-based Strategic Defense Initiative, or “Star Wars,” program.
Istituto Finanziario Industriale, the holding company of the Agnelli family and Fiat’s largest shareholder, was known to hold an option for buying back the Fiat shares that it had sold to Libya in 1977.
According to market speculation, the selling price of the Libyan stake was above current market prices--$3 billion, about 10 times the original investment made in 1977.
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