Fiat Chrysler Automobiles formally filed its initial public offering on Thursday to spin off Ferrari into its own separate company.
The filing doesn’t specify price or number of shares to be offered when the shares are publicly available sometime after Oct. 13.
Roughly 10 percent of the company will be publicly traded, with the rest of the company remaining under control of existing FCA shareholders and Piero Lardi Ferrari, Enzo Ferrari’s son and current vice chairman.
The IPO documents offers an exhaustive glimpse at the supercar maker’s finances and income. The Maranello-based manufacturer said they made €2.7 billion ($2.96 billion) in revenue in 2014 with profits of €265 million ($295 million). About 70 percent of the company’s revenues came from cars they produced, 11 percent came from engine sales to Maserati and the rest came from sponsorships and commercial revenue.
Sergio Marchionne, who is CEO of FCA, will stay on as chairman of the new company to be based in the Netherlands. The company will keep its Maranello factory and Formula One team based in Italy.
Ferrari’s F1 team and consumer-facing business — aside from cars — figures heavily into the future company’s success. In the IPO, the company mentions that its F1 program and sponsorships would factor into the viability of the future business. The company also mentions that its low-volume production strategy would remain, keeping its cars exclusive to well-heeled buyers.
10% share being sold? They just want to sell bunch of gaudy stock certificates that losers can frame and put on the wall.
It’s a secondary offering, which means that FCA is selling about 10/90 of the shares it owns (Piero Ferrari owns 10%), and pocketing the proceeds. None of the money from the share sale will go to Ferrari as a company.
So, it’s not about selling gaudy share certificates, it’s about FCA raising cash.
Since when is selling 10% of the company’s shares a spin-off? The Truth About High Finance must be some other website.
In its SEC filing, FCA says it intends to sell shares that represent about 10% of Ferrari’s total equity. It owns 90% of the company, apparently.
In the same filing, FCA declares an intention to distribute the remaining 80% of Ferrari that it will hold after this sale to FCA shareholders. Hence, a spin-off.
The second part, the massive “distribution,” would concern me more than just a bit, if I was a big FCA creditor…..
OTOH, perhaps it’s just too difficult keeping morale up in Maranello, when their supposedly premium gofast machinery is getting it’s tail kicked around like a football; by some truck engined, redneck, hairy chested stablemate from that country that doesn’t even understand what football really is….. :)
I’m also surprised that FCA is not looking to more directly monetize its Ferrari holdings, rather than just spin them off to shareholders.
I haven’t looked at their balance sheet recently, but would presume that they could benefit from having additional cash available for things like new product development.
The Agnelli family holding company owns about 36% of FCA and will get the lion’s share of the distribution. Sergio is off-loading an FCA asset but not a proportionate percentage of FCA’s debt. If he can’t find a merger partner, this could be seen as the first step of a liquidation, with other parts spun off to stockholders.
Eventually, there’s nothing left but the Fiat and Chrysler core, holding all the debt, destined for bankruptcy. Present stockholders get their asset spinoff money, and can write off their core holdings.