Fiat denied an Italian newspaper report that it’s planning a capital increase to raise money to boost its holding in Chrysler Group.

“There is no specific project” to sell new shares, and the company “believes that there is no need for a capital increase”, said Fiat yesterday in a statement, responding to a report by newspaper Il Messaggero.

The shares, which had fallen as much as 6.4 per cent, pared losses after the denial. Talks with banks on financing for the purchase of the remaining 41.5 per cent of Chrysler that Fiat does not already own are in their early stages and a decision isn’t imminent, said four people familiar with the matter.

Banks are proposing a range of options to Fiat, said the people, who asked not to be identified because the plans are private. – (Bloomberg)