Fiat Chrysler has filed for Ferrari’s IPO

Article by Christian A., on July 26, 2015

Fiat Chrysler Automobiles NV has submitted a filing for Ferrari’s initial public offering on the New York Stock Exchange, putting the unit a step closer to being spun off. In a filing with the U.S. Securities and Exchange Commission, FCA said that it aims for this separation to be completed early next year.

It is estimated that Ferrari is valued at over $11 billion. CEO Sergio Marchionne is hoping that this share sale will help reduce debt by raising approximately $5 billion. It is also meant to help fund an investment program worth 48 billion-euro ($53 billion) that will lead to the global expansion of the Jeep, Alfa Romeo and Maserati brands.

Erik Gordon, a law professor at the University of Michigan's business school, said that the question now is if the supercar brand’s stock will perform like a Ferrari. He explained that while there’s “glamor” in owning anything from Ferrari, it isn’t as easy to brag about having Ferrari stock.

Last year, Ferrari revealed that it wants to sell 10% of Ferrari in an IPO and to distribute the 80% stake that remains to its own investors. A 10% stock is owned by founder’s son Piero Ferrari, who wants to keep his holding. The filing reveals a loyalty share plan that gives more voting power to long-term investors.

The filing also revealed that other participants in the loyalty program include Piero Ferrari and Exor SpA, which is the investment vehicle for the Agnelli family that founded Fiat. The filing also mentions that Exor will hold over 30% of the voting power while around 15% will go to Piero Ferrari after the spinoff.

As of March 31, the balance sheet of Ferrari consists of 977 million euros in deposits that belong to Fiat Chrysler's cash pool. Ferrari will manage its own finances after the separation as joint cash-management arrangements will be terminated after the separation.

The company has unveiled that Ferrari is worth "at least" 10 billion euros, which means that it is equivalent to over 50% of the market value of its parent. Marchionne has said that he believes investors will consider Ferrari to be comparable to other producer of luxury goods like Prada SpA and Hermes International SCA.

These companies trade at more than 20 times earnings, double the value of automakers. In the first quarter, Ferrari's sales climbed 0.2% to 621 million euros. Its net income increased by 20% to 65 million euros. After the separation, Ferrari will be listed as a holding company with a Netherlands registration.

This same strategy was used by Marchionne in 2014 when he oversaw the merger of Fiat with Chrysler to create Fiat Chrysler. The joint bookrunners for the listing are UBS AG, Bank of America Corp.'s Merrill Lynch and Banco Santander SA. Meanwhile, UBS is the only global coordinator.

If you liked the article, share on:

Comments

Recommended

Are you a big fan of legendary boxer Mike Tyson, the former heavyweight world champion? Or are you a big fan of the iconic Ferrari F50? Either way, you will...
by - February 24, 2017
It seems that AM-RB 001 hypercar is not the only vehicle project that Aston Martin and Red Bull Racing has gone into. This time, don’t expect something as outlandish as...
by - February 24, 2017
The year 2018 marks the golden anniversary of Subaru of America. Of course, the company will celebrate 50 years of being at the helm of the brand’s crusade in North...
by - February 24, 2017
During car crashes and accidents, there are times that its occupants can’t get out easily. There are times when the only way to get out of that situation is to...
by - February 23, 2017
Could this be a special version of Ferrari’s much acclaimed LaFerrari? No matter how we look at it, the patent images for this sports car from Ferrari indicate its striking...
by - February 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries