Ever since the Fiat and Chrysler went through a tie-up, they are eyeing towards increasing their revenue in a very pacely manner. In a bid to increase the speed of gathering funds, the Fiat group has decided to use their cash cow, the Supercar manufacturer, Ferrari. Fiat-Chrysler will sell its ownership of Ferrari by releasing up to 90 per cent of the Italian brand to current FCA shareholders and 10 per cent to the public.
Interestingly, the news comes at a time when a long list of developments is experienced by the Italian Supercar maker. The latest being the departure of the former chairman Luca Di Montezemolo after 23 long years and technical director Roberto Fedeli. The Ferrari brand will be initially listed on the US stock market in 2015, followed by the listing in the European stock exchange too.
FCA CEO Sergio Marchionne said "Following our acquisition of the minority interest in Chrysler earlier this year, the transformation of Fiat and Chrysler into FCA was completed earlier this month with our debut on the New York Stock Exchange. As we move forward to secure the 2014-2018 Business Plan and work toward maximizing the value of our businesses to our shareholders, it is proper that we pursue separate paths for FCA and Ferrari."
But it's not the first time that talks of spinning off the Ferrari surfaced, since few years ago, Marchinonne shared his idea to split Ferrari from Fiat to the Board Directors. The then Ferrari boss, Montezemolo, opposed the move and the idea was shelved. Now with the departure of Montezemolo and Fedeli, it seems like Fiat had this plan coming for the Ferrari. Fiat is looking forward to raise £38 billion for a long-term investment plan and the Ferrari's sale will help Fait reach the target, which is currently standing at £18.65 billion in the third quarter of 2014.
"I am delighted to have taken this additional step in the development of FCA. Coupled with the recent listing of FCA shares on the NYSE, the separation of Ferrari will preserve the cherished Italian heritage and unique position of the Ferrari business and allow FCA shareholders to continue to benefit from the substantial value inherent in this business" said John Elkann, Chairman of FCA.
This may be the bumpiest period for Ferrari in its business history, we certainly hope that this may not create much of a trouble for the beloved manufacturer of the Prancing Horse.