Italian carmaker Fiat today announced it would cut 12,300 jobs as part of the loss-making company's third restructuring plan in two years.

Fiat's chairman, Umberto Agnelli, also said the company would seek to raise is €1.8bn through a share issue to fund the latest restructuring plan.

Fiat would close 12 factories in 2003-2004, almost all of them outside Italy, said chief executive Guiseppe Morchio. He said 12,300 jobs would be cut from a total global workforce of about 190,000 by 2006, the bulk of them also outside Italy. Under the plan, Fiat would breakeven at an operating level in 2004.

The company did not specify where the cuts and closures would happen.

The company's shares were suspended in Milan while the announcement was made. Fiat will issue 368.5m new ordinary shares priced at €5 each, with shareholders able to purchase three new shares for every five already held.

Fiat shares have halved in value in the last 12 months. A year ago, Fiat launched a back-to-basics revamp that refocused on the under-invested car unit and sold other assets like an aluminium castings unit, part of its stake in energy group Italenergia and its stake in General Motors.

GM owns 20% of Fiat, and the Italian firm has an option to sell the rest of the car unit to the US next year.