(Adds CEO quotes, background)
RIMINI, Italy, Aug 26 (Reuters) - The chief executive of Sanpaolo IMI , one of Fiat's major creditor banks, said on Tuesday there was no need to review the terms of a major loan to the carmaker after it recently completed a capital hike.
Fiat's creditor banks, led by Sanpaolo IMI, Banca Intesa , Capitalia and UniCredito , last year extended a three billion-euro loan, which was convertible into Fiat shares if some debt-related targets were not met.
There was speculation that the banks wanted to extend the loan deadline beyond 2005 to avoid the risk of having to take on a major stake in Fiat, prompting Fiat Chief Executive Giuseppe Morchio to say in June that he was willing to discuss revising the loan's terms.
Some observers thought the banks might have seized upon the recapitalisation as an opportunity to do just that.
But when asked if it was necessary to review the terms of the loan after the capital increase, Sanpaolo CEO Alfonso Iozzo told reporters, "No, they have 10 billion euros available," referring to the cash accumulated via the recapitalisation and recent asset sales.
"Morchio is doing well," he added.
Fiat's 1.8 billion-euro capital hike closed last month with a nearly 100 percent subscription, providing cash to fund the first steps of a plan to return to operating breakeven in 2004.
Fiat has also sold its most profitable non-core assets, including insurer Toro and aviation unit Fiat Avio.