The breakdown of guarantees issued is as follows:
|(€ thousand)||31 December 2013||31 December 2012||Change|
|Total other guarantees||14,820,878||12,677,284||2,143,594|
|Total guarantees issued||15,021,560||12,886,363||2,135,197|
At 31 December 2013, guarantees issued totaled €15,022 million, an increase of €2,135 million over 31 December 2012, and related principally to new bonds issued by the subsidiary Fiat Finance and Trade Ltd. S.A. (representing a €1,916 million difference between guarantees on the new bonds issued and on the bonds repaid during the year).
Guarantees outstanding at 31 December 2013 were as follows:
At 31 December 2013, sureties totaled €201 million, a decrease of €8 million over 31 December 2012.
This amount mostly relates to sureties provided on behalf of Group companies on Billets de Trésorerie issued (Fiat Finance and Trade Ltd. S.A. €15 million) and lease payments on property (€185 million). Sureties granted to third parties (approximately €1 million) relate to the remaining interest-bearing certificates issued by Sava and not yet redeemed.
At 31 December 2013, other guarantees totaled €14,821 million, an increase of €2,144 million over 31 December 2012.
All guarantees were issued on behalf of Group companies and consisted of the following:
- €1,357 million for loans (Fiat Finance S.p.A. €650 million, Fiat Automoveis S.A. - FIASA €275 million, Fiat Automobiles Serbia D.o.o. €271 million, Fiat Group Automobiles S.p.A. €75 million, Fiat Finance and Trade Ltd S.A. €40 million, Maserati S.p.A. €25 million, TCA – Tecnologia em Componentes Automotivos S.A. €21 million)
- €12,046 million for bonds issued (Fiat Finance and Trade Ltd. S.A. €11,015 million and Fiat Finance North America Inc. €1,031 million)
- €518 million for credit lines (Fiat Finance S.p.A. €370 million, Fiat Finance North America Inc. €73 million, Fiat Finance et Services S.A. €50 million and Fiat Finance and Trade Ltd. S.A. €25 million)
- €900 million for VAT receivables related to the VAT consolidation, pursuant to the Ministerial Decree of 13 December 1979 (as subsequently amended)
- In 2013, Fiat S.p.A. issued guarantees in connection with the agreement signed with a syndicate of Italian and international banks led by Citibank International for a €2 billion, 3-year revolving credit facility (subsequently increased to €2.1 billion) for Fiat Finance S.p.A. and other Group companies, which replaced the €1.95 billion 3‑year revolving facility obtained in 2011. At 31 December 2013, the facility was unutilized. At year-end 2012, the previous facility was also unutilized
- in 2005, in relation to the advance received by Fiat Partecipazioni S.p.A. on the 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 honor (following either an arbitration award or an out‑of‑court settlement) undertakings provided in relation to the sale and purchase agreement signed in 2003. Similarly, in connection with sale of a controlling interest in its rail business, Fiat S.p.A. provided guarantees to the purchaser, Alstom N.V., for any failure of the seller (now Fiat Partecipazioni S.p.A.) to meet its contractual obligations
In implementation of the resolution of the Board of Directors dated 18 February 2011 – and as part of the framework of the Partnership and Cooperation Agreement signed on 28 March 2011 by Politecnico di Torino, Fiat S.p.A., University of Windsor (Canada) and Chrysler for an International Masters in Automotive Engineering – Fiat S.p.A. and Politecnico di Torino renewed their cooperation agreement relating to courses in Automotive Engineering. The agreement covers a period of four academic years, from 1 October 2010 to 30 September 2014, under which Fiat S.p.A. will contribute €1.85 million per academic year (for a total of €7.4 million) up to 20% of which may be through contributions-in-kind (purchase of goods and services from third parties, provision of services or availability of assets, etc.). At 31 December 2013, the residual financial commitment was €1.39 million.
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
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 2013, potential obligations relating to these indemnities were approximately €178 million (approximately €368 million at 31 December 2012), 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.