Serbia, Fiat to complete sale of Zastava carmaker


BELGRADE, Dec. 21 (Reuters) - Serbia and Italy's Fiat have agreed on the completion of Fiat's purchase of a majority stake in the country's biggest carmaker, Zastava Automobili, a statement said on Monday.

In 2008 Serbia and Fiat created a 1 billion euro ($1.43 billion) joint venture, Fiat Automobili Srbija, in which the Turin-based manufacturer acquired 67 percent of the Zastava carmaker, while the government in Belgrade kept the remainder.

However, Fiat delayed its investment in Zastava last year due to the global financial downturn, leaving it to be run by Serbian government subsidies.

At a meeting with Serbia's President Boris Tadic in Turin on Sunday, Fiat's CEO Sergio Marchionne pledged that the deal with the Belgrade government will be signed this month, said a statement from Tadic's office.

"By the end of the year, Fiat will make its first 100 million euro payment, while the remainder will be paid quarterly," the statement quoted Tadic as saying.

While it delayed investments in Zastava this year, Fiat agreed with Belgrade to allow Zastava to assemble its Punto model for sale in Serbia and the Bosnian Serb part of neighbouring Bosnia.

According to economy ministry data, in 2009 the Zastava factory will produce a total of 15,000 Fiat Punto cars and earn 27 million euros. ($1=.6978 Euro) (Reporting by Aleksandar Vasovic; Editing by Zoran Radosavljevic and Jon Loades-Carter)



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