Fiat Chrysler Automobiles NV’s plan to raise money by spinning off Ferrari took a step forward with the automaker filing for the unit’s initial public offering on the New York Stock Exchange.
Fiat Chrysler, which has said it sees the supercar unit valued at more than $11 billion, plans to complete the separation in early 2016, the Italian-American manufacturer said in a filing with the U.S. Securities and Exchange Commission.
The stock sale is part of Chief Executive Officer Sergio Marchionne’s strategy to raise about $5 billion to cut debt and help fund a 48 billion-euro ($53 billion) investment program that focuses on expanding the Jeep, Alfa Romeo and Maserati brands globally.
Fiat Chrysler announced plans last year to sell 10 percent of Ferrari in an IPO and distribute its remaining 80 percent stake to its own investors. Piero Ferrari, the son of founder Enzo Ferrari, also owns 10 percent and plans to keep his holding. The filing provides for a so-called loyalty share plan, which would give long-term investors more voting power.
Exor SpA, the investment vehicle for the Agnelli family, and Piero Ferrari will probably participate in the loyalty program, according to the filing. After the spinoff, Exor is due to hold more than 30 percent of the voting power and Piero Ferrari about 15 percent, the filing said.
Cash Pooling
Ferrari’s balance sheet as of March 31 included 977 million euros in deposits that belong to Fiat Chrysler’s cash pool, according to the filing. After the separation, joint cash-management arrangements will be terminated and Ferrari will handle its finances on its own.
Fiat has said the Maranello, Italy-based unit is worth “at least” 10 billion euros, equivalent to more than half the parent company’s market value. Marchionne expects investors to view Ferrari as a luxury-goods maker, like Prada SpA and Hermes International SCA. These companies trade at more than 20 times earnings, twice the valuation of auto manufacturers.
Ferrari’s sales rose 0.2 percent to 621 million euros in the first quarter. Net income rose 20 percent to 65 million euros, according to the filing.
As part of the separation from Fiat, Ferrari will be listed as a holding company registered in the Netherlands. Marchionne used the same strategy last year when he led the merger of Italian carmaker Fiat with U.S. counterpart Chrysler to form London-based Fiat Chrysler.
UBS AG, Bank of America Corp.’s Merrill Lynch and Banco Santander SA are the joint bookrunners for the listing.
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