Fiat in Ferrari spin-off

Now Reading:

Fiat in Ferrari spin-off

Text size Aa Aa

Shares in Fiat Chrysler Automobiles (FCA) went into overdrive on Wednesday, shooting up after the carmaker announced its Ferrari luxury car division will become a separate company.

Ten percent of Ferrari will be sold to investors, with the rest of the stock distributed among existing Fiat Chrysler shareholders.

The spin-off of the super-car brand – due to take place next year – is part of efforts to raise money for Fiat Chrysler’s ambitious 48 billion euro growth plans, including expanding its Jeep and Alfa Romeo brands.

In addition it will issues bonds to raise $2.5 billion. Buyers of those bonds would be entitled to participate in the spin-off and receive shares of Ferrari.

“They seem to have sorted out their capital worries in one go,“Roberto Lottici, a Milan-based fund manager for Ifigest, said.

“It looks to me like they’ve packaged the Ferrari deal , as a pill to help sell the convertible after results that were far from overwhelming,” he added.

Earlier FCA reported a slightly lower-than-expected rise in third-quarter operating profit with debt higher than expected at 11.4 billion euros in September.

with Reuters