Fiat group sold the San Babila real estate unit of its Toro insurance subsidiary for E240 million to Morgan Stanley Real Estate Funds and Pirelli & Co.
The San Babila unit holds property assets in Milan, Turin, Rome and Mantua. Morgan Stanley has 75 percent of the joint venture and Pirelli holds the remainder.
Pirelli & Co. is a holding company that also controls Italian tire and cable maker Pirelli SpA.
The San Babila sale is part of Fiat's continued effort to reduce debt to E3 billion by the end of the year.
Another E70 million is expected to be generated when Fiat finalizes the sale of the Magneti Marelli Electronic Systems division, which produces instrument panels, trip computers and telematics.
The Marelli unit employs 3,400 people in its European, Latin American and Chinese operations. It generated E448 million in revenue in 2001. Terms of the deal call for the creation of a new company to incorporate the Marelli division.
Merkfin, a company owned by Italy's Fulchir family, will take 67 percent of the new company, while Fiat will retain a 33 percent stake. Fiat has an option to sell the rest of the company after 2006, dependant on it reaching specific results.
But the engine-management activities of the Electronic Systems division, which generated revenues of E122 million last year, will not be sold. Instead, they will be transferred to Marelli's powertrain division.