Ferrari valued at close to $10 billion as part of New York offering

Ferrari will be valued at almost $10 billion when part of the supercar manufacturer is offered on the New York Stock Exchange.

The sale - equivalent to 9% of the Italian brand - is part of a plan by parent company Fiat Chrysler Automobiles to raise crucial capital to help cut its debt and fund growth in its other brands, especially Jeep, Alfa Romeo and Maserati  - a plan which is expected to cost €48 billion.

A total of 17.2 million shares in Ferrari will be offered, with prices ranging from $48-52. Ferrari will be valued at around $9.82 billion as part of the offering. However, if the offering includes an over-allotment of shares to underwriters, the value of the company will reach $9.9 billion, representing a 10% stake.

Ferrari Chairman Piero Ferrari keeps his 10% stake in the business and receives a payout of €280 million as part of the deal.

Part of Ferrari’s separation from Fiat involves the company taking on €2.8 billion from its parent brand. Including that debt, Ferrari will have an estimated value of around $12 billion - a figure which FCA boss Sergio Marchionne has deemed appropriate. 

Despite faith in the automotive sector being shaken by the recent Volkswagen emissions scandal, insiders have suggested the Ferrari sale may be oversubscribed by as much as ten times the shares available.

Ferrari earned €389 million last year before interest and tax, on a total revenue of €2.8 billion. It delivered a total of 7255 cars in 2014.

The plan to formally split Ferrari from its parent company was announced in October 2014 when Marchionne confirmed the brand would be listed on the New York Stock Exchange. Announcing the move, he said: “As we move forward to secure the 2014-2018 Business Plan and work toward maximising the value of our businesses to our shareholders, it is proper that we pursue separate paths for FCA and Ferrari.”

Despite FCA’s troubles, Marchionne has said that Ferrari won’t follow automotive trends by producing SUVs and electric vehicles - it’s believed the brand’s exclusivity is part of its mainstream appeal. Papers filed by Ferrari last month reveal the brand plans to raise production to 9000 vehicles by 2019.

The remaining 80% stake in Ferrari will be offered to investors at the beginning of next year. The Agnelli family, the dominant shareholders in FCA, will keep voting control of the brand.

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