Fiat Chrysler Moves Ahead With Ferrari IPO; Carmaker Expected To Be Valued At $9.82B

Ferrari NV filed papers Friday for an initial public offering (IPO) in the United States, which could be launched as early as mid-October, and could value the luxury carmaker at $9.82 billion. The shares will be traded on the New York Stock Exchange under the symbol RACE, reports said, citing a filing with the U.S. Securities and Exchange Commission.

The move is part of the parent company Fiat Chrysler Automobiles NV’s CEO Sergio Marchionne’s efforts to reduce debts on Fiat Chrysler’s books and to fund a 48 billion euro ($54.5 billion) expansion plan, focusing mainly on enhancing Jeep, Alfa Romeo and Maserati on a global level, Bloomberg reported. The sale of the 17.2 million shares by the Dutch holding company Ferrari, 90 percent of which is owned by Fiat Chrysler, is valued between $48 and $52 a share. The stock is expected to be traded from Oct. 21, according to a report by the Wall Street Journal.

Fiat Chrysler had increased its 50 percent stake in Ferrari after the death of founder Enzo Ferrari in 1988. His son, Piero Ferrari, currently holds the remaining 10 percent and plans to retain it after the IPO, the New York Times reported. Piero will also receive 280 million euros in cash after the separation of Ferrari from Fiat Chrysler, Bloomberg reported.

Fiat Chrysler will sell roughly a 9 percent stake in Ferrari through the IPO, and plans to distribute the remaining 80 percent it owns to its shareholders by 2016, according to the filing.

The separation is expected to be completed by early next year, Reuters reported, adding that Ferrari will undertake a debt of 2.8 billion euros from the company and issue a projected debt of 2.128 billion euros to third parties. Ferrari will have an enterprise value of nearly $12 billion, including the debt, Bloomberg reported, citing the filing.

The news of the IPO, which was announced last year by Marchionne, who is also the CEO of Ferrari, led a rally in Fiat Chrysler stocks that increased 76 percent in the past year, the Journal reported.

The Ferrari stock is expected to be oversubscribed and initial requests for its shares are likely to exceed the amount available by 10 times, Bloomberg reported, citing a person familiar with the matter.

Ferrari delivered 7,255 of its supercars last year, with 389 million euros as its earnings before interest and taxes. It generated 2.8 billion euros in revenue last year, an increase of 18 percent from 2013. The Italy-based manufacturer reportedly said in the filing Friday that it expects to report revenue of about 720-730 million euros for the quarter ended Sept. 30.