Impairment (losses)/reversals on investments

Following is a breakdown of impairment losses and reversals on investments:

(€ thousand)20132012
Impairment losses:    
  • Fiat Gestione Partecipazioni S.p.A. (now Fiat Partecipazioni S.p.A.)
(465,300) (933,700)
  • RCS MediaGroup S.p.A.
(74,000) (35,266)
  • Teksid Aluminum S.r.l.
(17,100) (15,000)
Total impairment losses (556,400) (983,966)
Reversal of impairment losses:    
Fiat Partecipazioni S.p.A. (now FGA Real Estate Services S.p.A.) 16,000 -
Fiat Powertrain Technologies S.p.A. - 21,088
Total value of reversals 16,000 21,088
Total impairment (losses)/reversals on investments (540,400) (962,878)

An impairment charge of €465 million was recognized on the investment in Fiat Gestione Partecipazioni S.p.A. (now Fiat Partecipazioni S.p.A.) to realign the carrying amount of the investment to the book value of equity in the consolidated financial statements following a distribution of reserves to Fiat S.p.A. (see Note 1).

An impairment charge of €74 million on the investment in the listed associate RCS MediaGroup S.p.A. (€35 million impairment charge recognized in 2012) was primarily attributable to the significant losses reported in the fourth quarter of 2012 and first half of 2013 (attributable in large part to restructuring measures) and the financial difficulties experienced by the company prior to its recapitalization in July 2013. Both factors also had a significant influence on the company’s share price performance. The adjustment, which reduced the carrying value of the investment to €117 million (€1.34 per ordinary share), was based on a prudent valuation that took into account the earnings estimates in the 2013-2015 Development Plan presented at the beginning of 2013, as well as share price performance from the capital increase through year end. At the beginning of December 2013, the company presented the first phase of implementation of the above Development Plan to the financial community, indicating that results up to that moment had been in line with the Plan and, with regard to cost actions and debt reduction, had actually outperformed targets. For the first two months of 2014, the company’s share price was above December 2013 levels.

The €17 million writedown on the investment in Teksid Aluminum S.r.l. was primarily based on the reported loss for the year. The current carrying amount is considered representative of the investee’s estimated recoverable value.

For Fiat Partecipazioni S.p.A. (now FGA Real Estate Services S.p.A.), the €16 million impairment reversal reflected alignment of the carrying amount of the investment to the value of net assets transferred to Fiat Group Automobiles S.p.A. as a contribution to capital (see Note 11).