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Fiat Chrysler to spin off Ferrari into separate unit Fiat Chrysler to spin off Ferrari into separate unit
(about 1 hour later)
Fiat Chrysler Automobiles (FCA) plans to spin off Ferrari and sell a 10% stake in the luxury carmaker on the stock market.Fiat Chrysler Automobiles (FCA) plans to spin off Ferrari and sell a 10% stake in the luxury carmaker on the stock market.
The remaining Ferrari shares would be distributed among FCA shareholders.The remaining Ferrari shares would be distributed among FCA shareholders.
The carmaker wants to complete the spin-off next year, with Ferrari shares listed in the US and possibly having a European listing too.The carmaker wants to complete the spin-off next year, with Ferrari shares listed in the US and possibly having a European listing too.
The sale is part of a bigger plan by FCA to raise €48bn ($61bn; £38bn) to fund an investment plan.The sale is part of a bigger plan by FCA to raise €48bn ($61bn; £38bn) to fund an investment plan.
Fiat Chrysler chief executive Sergio Marchionne said it was "proper that we pursue separate paths for FCA and Ferrari" following the completion of the merger of Chrysler and Fiat with a listing on the New York Stock Exchange on 12 October.
The following day, Ferrari president Luca di Montezemolo officially left the company.
Mr di Montezemolo's departure from Ferrari followed a public spat over strategy with Mr Marchionne. He has since taken over as chairman of the luxury carmaker.
Mr Marchionne had been a vocal critic of the on-track performance of Ferrari's Formula One team, particularly its lack of world titles since 2007. He has pledged to get the team back to winning ways.
Rescue deal
Earlier this month, he described the merger between Fiat and Chrysler as "the end of a long historical cycle".
That merger began when Chrysler filed for Chapter 11 bankruptcy protection in April 2009.
Chrysler had agreed a deal with its creditors including JP Morgan, Citigroup and Goldman Sachs, brokered by the US Treasury and Obama administration, to write off two-thirds of the car manufacturer's debt.
But a group of hedge and investment funds refused to accept the last-minute debt-for-equity package, which would have seen Chrysler's $6.9bn (£4.6bn) debt cancelled in return for a cash payment of $2bn.
When it emerged from bankruptcy later that year, Fiat owned 35% of the company, alongside the United Auto Workers pension fund on 41.5% and the US and Canadian governments owning the remainder.
Over the last five years, Fiat has bought out Chrysler's other owners, buying the final tranche of the car manufacturer from the United Auto Workers pension fund in January.
A Ferrari spin-off had long been anticipated by industry experts as Mr Marchionne seeks to maximise values from the group's various brands.
Profit
There are no plans to spin off FCA's other luxury brands, including Alfa Romeo and Maserati, it said.
The announcement of the Ferrari spin-off comes as FCA said it returned to profit in the third quarter on a strong rise in sales of its luxury brands, as well as revenue gains in North America and Asia.
FCA reported a net profit of €174m for the three months to the end of September, compared with €15m a year earlier.
Revenues were 14% higher at €23.5bn. Luxury brand sales increased 35% overall, while North America saw a 20% rise in revenues and sales in Asia rose 30%. Both markets helped offset a 12% fall in revenue in a weak Latin American market.