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Next Alfa Romeo Rumored to be a Larger SUV

Discussion in 'Mopar News' started by Hemidakota, Dec 28, 2017.

  1. Erik Latranyi

    Level III Supporter

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    The next acquisition will be used to fund Chrysler and Dodge while those brands whither.......until the next acquisition. It is an automotive Ponzi scheme.
     
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  2. AlfaCuda

    AlfaCuda Active Member

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    Looking at how small the Alfa and Maserati ranges are and sales numbers so far I would say they are a success.
    It remains to be seen if this can be sustained.
     
  3. DAGAR

    DAGAR Active Member

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    The like was for making me laugh... good one, Erik :p:D
     
  4. MJAB

    MJAB Well-Known Member

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    It looks like You made some confusion with companies and the cash flows.

    1) Ferrari was spin-off from FCA (that had 90% of it). It is a separate company from FCA, today FCA has 0 shares in Ferrari.
    It has nothing to do with FCA and FCA's companies. So it cannot fund them since it has already done.
    2) Ferrari received as "gift" from FCA debt originated not in Ferrari, but the other companies of FCA.
    3) From Ferrari initial quotation on stock marker, FCA recaived something less than USD 1 billion.
    4) Total amount of the above + debt transferred from FCA to Ferrari amounts to more than Euro 3.5 billion.
    5) Ferrari doesn't usually distribute profits to shareholders, the value of the share includes the profits, without distribution. (Same is for FCA).
    6) Maserati margin are known, it is easy to see what margins are, EBIT, adjusted EBIT, ... just looks financial numbers.

    The numbers are public, easy to find in annual reports (the annual ones, usually 300 pages or more).
    The problem is the will of the persons to inform themselves.

    Next to be spin-off will be Magneti Marelli and COMAU very likely in 2018.
     
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  5. Erik Latranyi

    Level III Supporter

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    Its the holidays, we should all share a laugh.
     
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  6. Ernesto

    Ernesto Active Member

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    While in Fort Collins, we bought my younger daughter a Whirlpool dishwasher with stainless steel interior and 47 db noise level. I come home and learn my Whirlpool has cheap plastic interior and 51 db noise level. I'm not laughing.
     
  7. cygnus

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    1) I never implied that Ferrari was funding current operations. The last sentence in my post suggested that Ferrari should be using their profits to fund Maesarti/Alfa (all three should be under the same holding company, whatever they want to call it). Alfa/Maesarati should not be tied to CDJR.

    2) Do you have a URL to cite data from that statement?

    3) Are you saying FCA receive Ferrari stock in the IPO? The Agnelli family most likely holds the stock, not FCA.

    4) This is where I begin to question this - FCA still has debt, but only transferred a portion of that debt to Ferrari? Or were they raising debt under Ferrari's credit rating and using it to fund FCA operations and the money was funneled in a one time transfer and FCA pays the debt on Ferrari's behalf? Something about this structure doesn't seem correct. See my 6th point, the math on Maserati units isn't adding up as well.

    5) If Ferrari increases their profitability the value of the shares goes up. Ferrari being cut off from all other FCA companies increases their profitability. If I implied a dividend, that wasn't my intention.

    Here is an article discussing the debt that Ferrari paid FCA - Ferrari Set to Pay Fiat Chrysler $2.8 Billion Ahead of IPO Split (at http://www.carbuzz.com/news/2014/11/16/Ferrari-Set-to-Pay-Fiat-Chrysler-2-8-Billion-Ahead-of-IPO-Split-7723707/ )

    But who knows how or when the cash was transferred. Do you? Can you cite a page from a published FCA financial report? I haven't gone through the FCA financial reports thoroughly enough, yet. I might one weekend.

    6) I looked up the data on Maserati - https://www.fcagroup.com/en-US/inve...ts/files/FCA_NV_2017.09.30_Interim_Report.pdf

    Maserati's revenue has somehow gone from 873 million euro globally, to 2800 million euro globally for the financial year 2016.09.30 to 2017.09.30

    but shipments from the last PR release I can find that mentions Maserati sales (FCA US Reports April 2017 Sales (at https://www.prnewswire.com/news-releases/fca-us-reports-april-2017-sales-300449574.html )) only has a 19% increase in shipments YoY (granted it's only until April 2017 but that's a far cry from TRIPLING revenue).

    Magically, all mention of Maserati has disappeared (FCA US Reports November 2017 Sales (at https://www.prnewswire.com/news-releases/fca-us-reports-november-2017-sales-300565172.html ))

    Long story short - I think FCA is pulling some financial trickery; nothing illegal, but again, Jeep/Ram profits are being diverted to Alfa/Maserati. FCA's benefit from Ferrari taking FCA debt isn't something I've been able to locate in a financial report.
     
  8. freshforged

    freshforged Well-Known Member

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    Re: 6– hasn’t the euro taken a big hit since Brexit? Not an international finance expert, but when combined with increased export sales to China and America, would that not dramatically boost profit?
     
  9. T_690

    T_690 Active Member

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    Euro is still at the similar level. British pound took the hit.
     
  10. MJAB

    MJAB Well-Known Member

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    The opposite, the Euro went up in last year, for example vs. dollar was around 1.05 in january 2017 and by the end of the year was at 1.20.
     
  11. MJAB

    MJAB Well-Known Member

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    1) I understood not right what You wanted to say.
    Maserati was coupled with Ferrari some years ago, since 1997 year in which Fiat transferred Maserati to Ferrari to 2005 when Fiat took it back.
    Fiat bought Maserati in 1993 from De Tomaso.

    2) Have to search again the links.

    3) Ferrari IPO (simplified description).

    FCA had 90% and Piero Ferrari had the 10% of Ferrari S.p.A..
    Was created a holding in the Netherlands.
    FCA put on stock market (the IPO) 10% of Ferrari, so its share went from 90% to 80%.
    FCA received from selling its 10%, if I remember well about USD 980 million.
    After some time the shares in the hands of FCA were distributed to FCA shareholders + the part for the convertible bond to be pid in Ferrari shares (FCA option shares or cash), weel is more complicated since there is also a mandatory convertible bond (and from that data, since a dutch law for companies, we know that at the time Marchionne owned about 1% of FCA shares).

    4) I oversimplified, FCA used a mix of all what You wrote.

    Ferrari had no net debt, the opposite it had from its financial document a positive position.
    FCA used some of Ferrari cash for its activities (can be found also in FCA annual reports).

    At the time Piero Ferrari, from an article appeared in italian newspaper, arrived to make write on annual documents that he didn't agree to not distribute the dividends for that year (unusual move, usually that divergences are not put on paper).
    note: for private capital companies in Italy, even if not quoted, anyone can access and view the deposited balance sheet and balance approval documentation.

    I think Marchionne, or someone else, used that lever (money) to allow them to do all the operation and, more importantly, "take all money Ferrari bank account and left behind debts".

    FCA wrote in a document to SEC that FCA would do some financial operation, comprising the transfer of cash and dividends from Ferrari to FCA by a value estimated at the time of Euro 2.25 billion (add to that another Euro 250 million for Piero Ferrari 10%, since FCA had the 90%).

    Than there is also the 2 years mandatory convertible bond of USD 2.5 billion (at the time about Euro 2 billion).
    At the end the payment could be made in Ferrari shares or cash based on FCA decision.
    Sorry in italian: Fca, maxi-cedola da Ferrari (at http://www.ilsole24ore.com/art/finanza-e-mercati/2014-11-14/fca-maxi-cedola-ferrari-064118.shtml?uuid=ABrO2nDC )

    I re-found one official document, but there were other documents with modifications.
    http://services.corporate-ir.net/SE...sZXJBdXRvbW9iaWxlc05WX0YxQV8yMDE0MTExMy5wZGY=

    At page 53:
    "...
    the proposed spin-off of Ferrari from FCA. In particular, on October 29, 2014 we announced our intention to separate Ferrari from FCA through a combination of a public offering of 10 percent of Ferrari from our current shareholding and a distribution of our remaining 80 percent of Ferrari shares to our shareholders (the “Separation”). These transactions are expected to occur in 2015. Prior to the Separation we also intend to enter into certain other transactions including distributions and transfers of cash from Ferrari to FCA currently estimated at €2.25 billion (the “Distributions”).
    ..."

    Here You can find one of many articles about Ferrari debt being higher than expected by analysts after spin-off.
    Ferrari Shares Skid as Debt and Outlook Disappoint (at http://www.industryweek.com/global-economy/ferrari-shares-skid-debt-and-outlook-disappoint )
     
    #31 MJAB, Jan 1, 2018
    Last edited: Jan 1, 2018
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  12. cygnus

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    Oh hey, it's my fourth year anniversary on joining Allpar.com

    Happy New Year!

    @MJAB - that's a pretty thorough breakdown. I would agree, based on the evidence that you cited, that Ferrari has taken some of FCA's debt and I reverse my prior assertion that FCA did not benefit from the Ferrari IPO. It seems that they 'spun off' Ferrari, made 10% of it available to the public (never truly relinquishing control of it), took the cash from the IPO back to FCA, and FCA gave Ferrari debt in return.

    Based on the financial co-mingling of the assets/debts between all the parties, it doesn't really strike me that Ferrari is separate from FCA. They just took the investors for a ride/raised some cash. Slick.

    In summary, I still disagree with the overall operational strategy of having Alfa/Maserati intertwined with CJDR. I think you can get away with it when you have a Toyota/Lexus & VW/Porsche structure where the 'profit' entity resides in the same country/HQ, but the reality of human nature lends itself to 'disconnects' between the two entities when international boundaries come into play. We will see. I hope I am wrong, again.
     
    #32 cygnus, Jan 1, 2018
    Last edited: Jan 1, 2018
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  13. JavelinAMX

    JavelinAMX Well-Known Member

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    Happy anniversary - :)
     
  14. MJAB

    MJAB Well-Known Member

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    Happy new Year to All.

    Since I had to remember for @cygnus point 2 of previous posts, I remebered that the data can be found, for example, in annual report 2016 (the full text one).

    And there is also why analysts were surprised since they expected a lower Ferrari net debt, instead there were about extra 300 million, and how the money was transferred.

    https://www.fcagroup.com/en-US/inve...cial_reports/files/FCA_2016_Annual_Report.pdf
    Page 165.
    "...
    In October 2015, in connection with the Ferrari IPO and in preparation for the spin-off of the remaining common shares of Ferrari N.V. owned by FCA, FCA carried out an internal corporate restructuring. As part of this reorganization, FCA transferred its shares of Ferrari S.p.A. to Ferrari N.V. and provided a capital contribution to Ferrari N.V., while Ferrari N.V. issued a note payable to FCA in the amount of €2.8 billion. This internal restructuring was a common control transaction and did not have an accounting impact on the Consolidated Financial Statements. As a result and in connection with the transactions in which Piero Ferrari exchanged his shares in Ferrari S.p.A. for Ferrari N.V. shares, FCA paid €280 million to Piero Ferrari as consideration for the dilution of his share value due to the issuance of the€2.8 billion note payable, which was recorded as a reduction to non-controlling interests.
    ..."

    Net amount from IPO for FCA was Euro 866 million.

    Were not paid, at least it looks lie that, taxes of plusvalue.
    "...
    Since Exor N.V., which controls and consolidates FCA (refer to Note 24, Related party transactions), will continue to control and consolidate Ferrari N.V. after the spin-off, this was deemed to be a common control transaction and was accounted for at book value.
    ..."

    And for FCA using Ferrari better credit rate, as @cygnus wrote, a last minute use:

    "...
    The Liabilities held for sale at December 31, 2015 included a bridge loan (the “Ferrari Bridge Loan”) and a term loan (the “Ferrari Term Loan”) of €2 billion in aggregate entered into by Ferrari N.V. on November 30, 2015, which were used to refinance indebtedness owed to FCA. The €500 million revolving credit facility (“Ferrari RCF”), also entered into on November 30, 2015 was undrawn at December 31, 2015.
    ..."
     
  15. freshforged

    freshforged Well-Known Member

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    Makes sense
    Thank you for the clarification.
     
  16. Ernesto

    Ernesto Active Member

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    Shocker! Allen Samuels in Waco sold a Stelvio today. This dealer had been sitting on a 29 Stelvio inventory for weeks and weeks. Still stuck with the familiar number of 34 Guilias. I've never seen either on the street but I understand a white Guilia sits at an office on Lake Shore. Tomorrow I may go take a look.
     
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  17. Tomguy

    Tomguy Well-Known Member

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    I wouldn't take what you see on the streets as an indicator to what's going on nationwide with sales or inventory. I've already seen 2 Giulias AND a Stelvio on the road in the last month. I've seen more Giulias in the last week than Charger Scat/SRT/Hellcat combined (one). Doesn't mean anything. What does is the margins - not even per vehicle but as a whole. Those 8.9k Giulias sold last year surely brought more profit than the 28.5k 200s and Darts combined.
     
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  18. Zagnut27

    Zagnut27 Jeepaholic
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    Since our local Fiat dealership closed, I was hoping they’d convert it into an Alfa dealer. It would be super close to me, as opposed to driving up into Pennsylvania. I wish I could find out if they had plans to expand there (there are none currently in Delaware).
     
  19. DrMark

    DrMark Member

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    I saw a Stelvio at church this past Sunday. I've seen a couple Giulias and a Levante around.
     
  20. mopar22

    mopar22 Well-Known Member

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    Where are you located?
     

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