INITIAL PUBLIC OFFERING: The FCA group, in bid to alleviate its huge debt, has a filed a request with US regulators for a New York stock-market listing. Image: Supplied
MILAN, Italy - Italian automaker Ferrari has taken a step closer to a stock-market listing in New York as its parent Fiat Chrysler Automobiles seeks to boost its own coffers to fund an ambitious R659-billion investment plan.
FCA said on Thursday (July 23 2015) that Ferrari, the brand famous for its "prancing horse" logo and its Formula 1 racing team, had filed a request with US regulators for a New York initial public offering.
The Maranello, northern Italy-based maker of models such as its 488 GTB and the million-euro LaFerrari could attract a market value the equivalent of R137-billion, according to Sergio Marchionne, FCA chief executive and Ferrari chairman.
Analysts believe it could be half that.
FCA, home to a stable of brands ranging from Fiat and Jeep to Alfa Romeo, has one of the highest debt loads in the industry and needs the funds from the flotation of its most prestigious brand to help finance its own plan to boost sales by 60% to seven-million cars by 2018 and increase net profit five-fold.
FCA said last year it would sell up to 10% of Ferrari via the share offering and would distribute the rest of its stake to its shareholders. The float is expected after mid-October while the separation should be completed in early 2016.
WALL ST BLUEPRINT
Following the blueprint of Fiat's marriage with Chrysler and a New York listing of the merged entity in 2014, FCA will create a Netherlands-registered holding company for Ferrari and list its shares on Wall Street, according to the filing with the US Securities and Exchange Commission.
Ferrari may apply for a secondary listing in Milan.
FCA currently owns 90% of Ferrari; the remaining 10% held by Piero Ferrari, vice-chairman and son of the founder Enzo, who died in 1988.
As in FCA's case, Ferrari's float will also include a loyalty share scheme for long-term investors, set to tighten the grip on the company by Fiat's founding Agnelli family which, through its holding company Exor and Piero Ferrari, together could end up with a voting power of just under 51%, enabling them to thwart any unwanted takeover.
UBS will be the offer's global co-ordinator, with BofA Merrill Lynch and Santander joint book-runners.
A successful Ferrari listing would bolster FCA's finances at a time when its search for a merger partner to deal with falling margins and high development costs appears to have fallen on deaf ears.
'ACT OF PURIFICATION'
Marchionne sent an e-mail earlier in 2015 to his counterpart at US rival General Motors proposing a tie-up, but was rebuffed.
Some analysts say the divorce from Ferrari could make it easier to prepare FCA for a potential merger as Ferrari made it harder to assign a value to FCA.
Separating it from FCA's brands such as tiny Fiat 500 and sporty Maseratis was "an act of purification" to unlock value at both, Marchionne has said.