Ferrari and Fiat had a long standing history of 45 years, until recently, when Fiat decided to segregate Ferrari from the Fiat Chrysler core group. The reason cited was simple, Fiat is trying to raise capital to plan the future of the group. The strategy was simple, raise money by selling Ferrari. While Ferrari was to be sold through Initial public offering, in a latest move, Fiat had asked Ferrari to pay some $2.8 billion before spinning-off.
According to a filing with US regulators, FCA (Fiat Chrysler Automobiles) intends to "enter into certain other transactions, including distributions and transfers of cash from Ferrari currently estimated at 2.25 billion euros ($2.8 billion)" before it spins the Supercar maker off. This amount is said to be paid as a dividend to the investors, and some debt money too.
The earlier reports stated that in order to spin-off Ferrari from the FCA, FCA will sell 10 percent of the shares in the public market, 80 percent will be distributed among the current shareholders and 10 percent will remain with the chairman of Ferrari, Mr. Piero Ferrari. The public offering is said to be undertaken in the U.S trading market and possibly in Europe too.
The news of Ferrari spin-off came as a shocker to the fans around the globe, since Fiat was providing the financial stability to the Italian Supercar manufacturer. While FCA CEO Sergio Marchionne was in favor of spinning off Ferrari for years, it was the former Ferrari chairman Luca di Montezemolo, who was acting as a roadblock for the same. With no more Montezemolo in the picture, Marchionne has finally got what he wished.
The only concern was related to the survival of the Ferrari brand. And with this $2.8 billion payout, Ferarri will be poorer than before. We hope everything goes well with this cult brand.