MILAN - Fiat has agreed to sell aviation unit Fiat Avio to U.S. private equity fund Carlyle and Italian defense group Finmeccanica, a newspaper reported on Sunday.
Fiat, whose group operating loss widened to 342 million euros ($402 million) in the first quarter, impacted by a 334 million euros loss at core unit Fiat Auto, had earlier agreed to sell cash-generating unit, insurer Toro for 2.4 billion euros.
Il Sole 24 Ore financial daily said without revealing its sources that the sale price for Fiat Avio was fixed at 1.55 billion euros -- 50 million euros less than its earlier estimated value.
Fiat -- seeking to raise cash to help turn around its core car unit and pay off debts -- and Carlyle signed a memorandum of understanding on the sale of Fiat Avio on April 7, putting an enterprise value of 1.6 billion euros on the unit.
Pierfrancesco Guarguaglini, chairman of Finmeccanica, which would get a 30 percent stake in Fiat Avio with the rest going to Carlyle, has said the sale price could vary slightly from the enterprise value.
Il Sole said the buyers requested a price cut after Fiat Avio's revenues and profits slipped in the first quarter.
Fiat declined to comment on the report. Finmeccanica officials were not immediately available.
Il Sole said the official agreement on the long-awaited sale would be signed within a few days, at the Paris Air Show.
The Fiat Avio sale also will need approval from Italy's Defense Ministry, which has a series of contracts with the company. Fiat Avio is involved in projects to power the Eurofighter and the U.S. Airforce's F22 Raptor fighter jet.