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Ferrari Split Moves Forward

by David Zatz on

Bloomberg News reported that the spinoff of Ferrari from Fiat Chrysler Automobiles has moved forward. FCA has applied for an initial public offering of Ferrari stock on the New York Stock Exchange, where FCA is traded.

Ferrari’s worth is currently estimated at around $11 billion. The split is not due until calendar-year 2016, and is aimed at helping FCA cut $5 billion from its debt. The company aims to spend around $53 billion over the course of several years to expand its key upscale brands around the world — Jeep, Maserati, and now Alfa Romeo.

Ferrari-Sergio-3

If Ferrari does find buyers at the initial $10 billion price, FCA would only earn $1 billion from it, though another $1 billion or so in cash is expected to be repatriated from Ferrari’s balance sheet as well. Thus, a spinoff of other business may be in the cards as well.

10% of Ferrari would remain with Piero Ferrari, and 80% would go to FCA stockholders in proportion to their shares.  Ferrari will have a program similar to FCA’s “loyalty share” system which gives long term investors 1.5 times as many votes as new shareholders; the Fiat family’s stake would be around 20% of Ferrari.

Ferrari makes much of its cash through licensing of its name, as well as racing; it only builds 7,000 cars per year, but had a net profit of 65 million euros (on 621 million euros of sales) in the first quarter.


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