Fiat to spin off Ferrari, list shares on stock market

Fiat Chrysler Automobiles (FCA) has announced plans to spin off supercar marque Ferrari in an attempt to generate funds for its turnaround plan. The spin off is expected to be completed in 2015 and will include a $2.5 billion convertible bond issue.

The group, which owns 90% stake in the legendary brand, will list 10% of the shares in the US stock market and possibly Europe, while the remaining 80% will be distributed among FCA shareholders. Piero Ferrari, vice-chairman and son of Enzo Ferrari, owns the other 10%.

FCA plans to focus on its other brands such as Maserati, Jeep and Alfa Romeo to turn them into rivals for premium brands like BMW and Volkswagen.

Some weeks ago, Luca di Montezemolo, Ferrari's long-serving chairman was replaced by Sergio Marchionne, who is likely to remain Ferrari's chairman after the spin-off. Ferrari sells around 7,000 vehicles a year. The separation from the mass market players will help enhance the brand's exclusivity.

Brokers estimate that Ferrari could have a value of between 4.4 and 5.8 billion Euros depending on whether it carries any debt or cash.

Source: Reuters