Ferrari steers away with $10bn IPO offering

Posted on 12 Oct 2015 by Callum Bentley

Ferrari's parent company, Fiat Chrysler Automobiles (FCA), has today announced that Ferrari will launch its initial public offering (IPO).

FCA, currently holding a 90% of Ferrari’s issued and outstanding share capital, intends to sell 17,175,000 common shares of Ferrari.

The initial public offering price is currently expected to be between $48 and $52 per share, and the shares will trade under the symbol, “RACE”. Ferrari has applied to list its common shares on the New York Stock Exchange.

The listing places the value of the company at about $10bn.

According to Bloomberg, the move to separate Ferrari has been made by Fiat Chrysler CEO, Sergio Marchionne in an attempt to raise funding to cut the parent company’s debt and help finance a $54.5bn investment program that focuses on expanding other marques in the Fiat Chrysler family, including Jeep, Alfa Romeo and Maserati.

As part of the separation, Ferrari will also take with it €2.8bn in debt.

Ferrari’s earnings before interest and taxes last year amounted to €389m on €2.8bn of revenue as the company delivered 7,255 of its iconic supercars.

Ferrari said earlier in the year that it has intentions of raising production figures form its Maranello headquarters to 9,000 vehicles annually by 2019.

However it would still limit these figures to just below demand in order to maintain exclusivity.