Fiat considering Ferrari IPO to increase its stake in Chrysler

Article by Christian Andrei, on September 27, 2010

As Fiat S.p.A. looks for ways to fund the acquisition of 51% of Chrysler, it is believed to be considering the possibility of listing part of Ferrari S.p.A., according to Italian newspaper Il Corriere della Sera which cited information taken at Fiat's Turin headquarters. The report stated that Fiat's main priority is to find liquidity to fund the acquisition.

However, a Fiat spokesman said that this report is false and that there are no plans for any Ferrari listing.

Last Thursday, Fiat and Chrysler Group CEO Sergio Marchionne talked about Fiat's future plans with Ferrari. He said that it’s possible that there would be a Ferrari initial public offering before 2014.

But he also stated that he wants to raise Fiat’s stake in Ferrari to 90% from 85% now, if it can be done without dropping Abu Dhabi investment fund Mubadala, which owns 5%.

As soon as restructuring goals are met, Fiat, which owns 20% of Chrysler, is expected to raise its holding to 35%.

It has an option to increase the stake to 51%. From the results of a new study, consultancy Sanford C. Bernstein said it predicts Fiat to increase its stake in Chrysler to 51% in 2011 or 2012.

The Il Corriere report stated that Fiat will keep a majority 51% stake in Ferrari. [via autonews - sub. required]

Topics: fiat, ipo, chrysler

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