Fiat-Chrysler Not Selling Ferrari, Just Raising Cash to Pay Debt

Ferrari F12 Berlinetta doing donuts 1 photo
Photo: original photo by autoevolution
FCA's announcement made many publications erroneously title the bit of info as "Ferrari is for sale" and such. But that clickbait style of titling doesn't hold water. There's a lot of background to this story and the fine details aren't that easy to read through.
Before Ferrari chief Luca di Montezemolo argued with Fiat-Chrysler Automobiles NV's numero uno Sergio Marchionne, the automotive group slowly, but steadily accumulated a lot of debt. Why? We won't point the finger, but we'll mention some FCA car brands and recall operations rocketed the debt.

Although chief executive officer Sergio Marchionne is dressing Ferrari's spin off in pretty words such as "the mixing of their blood would be fatal for both," referring to Ferrari being under the same umbrella as Fiat-Chrysler Automobiles NV, the truth behind this move is more financially-related than it's believed.

10 percent of Ferrari S.p.A. shares will be listed on stock exchanges in the United States and Europe

That's how next year will bring in an estimated $2.5 billion to the group thanks to people like you and me that are now offered the chance to freely buy and sell Ferrari shares. Curious about what will happen to the remaining 90 percent stock?

It's going to "allow FCA shareholders to continue to benefit from the substantial value inherent in this business," but also "work toward maximizing the value of our businesses to our shareholders, it is proper that we pursue separate paths for FCA and Ferrari." In plain English, remaining stock will go to FCA's current investors.

This is how the jewel of the newly-founded Fiat-Chrysler Automobiles NV is going to roll in the near future. It's not about anything fancy. It all boils down to the money Fiat-Chrysler needs to keep its 11.4 billion euros debt in check. Just like di Montezemolo said after he resigned - "Ferrari is now American."
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 Download: FCA Announces Board Intention to Spin Off Ferrari S.p.A. (PDF)

About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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