“There may be a bit of glamor in owning a Ferrari or, for some, a Ferrari t- shirt, but it is hard to show off a share of Ferrari stock”.
Automobile major Fiat Chrysler Automobiles (FCA) is on the verge of taking a final call on whether to divest its auto parts wing Magneti Marelli in the face of potential buyers expressing interest.
FCA now owns 90 per cent of Ferrari, with the remaining 10 per cent held by Piero Ferrari, vice chairman and son of the founder Enzo, who died in 1988.
Ferrari started rolling toward its long-awaited initial public offering on Thursday by filing documents with the SEC that could see the IPO hit the market by the end of the year.
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.
Speaking about the initiative, Kevin Flynn, President and Managing Director, Fiat Chrysler Automobiles India Operations, said, “FCA India is swiftly taking efforts to reach out to its current and prospective customers through check-up camps”.
And even though it only sells a small number of cars annually, Ferrari generated more than $3 billion in revenue last year and a profit of $423 million.
“Ferrari is capable of being a fully fledged luxury brand, and as such, it would occupy a space in the luxury goods sector, which is – which shares its name with Ferrari and maintains the same level of attachment to exclusivity”, Marchionne said in January. These companies trade at more than 20 times earnings, twice the valuation of auto manufacturers. Net income jumped 20 percent to 65 million euros, according to the filing.
Netherlands-based Fiat Chrysler did…
The company mandated Swiss bank UBS as the global coordinator for the IPO.