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Fiat mulls Ferrari IPO to boost Chrysler stake, report says

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Fiat mulls Ferrari IPO to boost Chrysler stake, report says

Automotive News Europe -- September 27, 2010 06:01 CET

Fiat S.p.A. is considering listing part of Ferrari S.p.A. to raise cash to increase its stake in Chrysler Group to 51 percent, an Italian newspaper reported.

Citing information gathered at Fiat's Turin headquarters, Il Corriere della Sera said Fiat's main priority is to find liquidity to allow it to fund the acquisition of 51 percent of Chrysler. Listing Ferrari could be the way to achieve that goal.

A Fiat spokesman denied the report. "There are no plans for any Ferrari listing," he said.

Fiat owns 20 percent of Chrysler and is expected to increase its holding to 35 percent once it meets restructuring goals. It has an option to grow the stake to 51 percent.

In a recent study, consultancy Sanford C. Bernstein said it expected Fiat to raise its stake in Chrysler to 51 percent in 2011 or 2012.

According to Il Corriere, Fiat would keep a majority 51 percent stake in Ferrari.

Fiat could gain considerable cash from a Ferrari IPO, even retaining a 51 percent controlling stake and floating its remaining 34 percent -- or 39 percent if it buys back a 5 percent stake owned by Abu Dhabi investment fund Mubadala.

In a recent report, Morgan Stanley in London valued the new Fiat S.p.A. as being worth 7.8 billion euros ($10.2 billion). Ferrari represented 3.1 billion euros ($4.0 billion) in value.

Fiat and Chrysler Group CEO Sergio Marchionne gave mixed messages Sept. 16 about Fiat's future plans with Ferrari.

He said he would not exclude a possible Ferrari initial public offering before 2014. He also said that he would like to see the Italian automaker raise its Ferrari stake to 90 percent from 85 percent now, if it could do so without losing the Mubadala stake.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100927/ANE/309269994/1193#ixzz10k4h7mlk

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By Mark Kleis

Although many American may not realize it, Fiat not only owns a substantial stake in General Motors, but also an 85 percent share of exotic sports-car maker Ferrari.

The rumormill is in hyperdrive as it suggested for the first time in days that Fiat brass is contemplating the sale of some of its 90 percent stake in Ferrari.

If the report by Il Corriere della Sera is to be believed, Fiat CEO Sergio Marchionne has just cast a massive vote of confidence in the Chrysler brand as he moves to sell successful Ferrari shares in order to secure the proper level of liquidity necessary in order to increase the automakers' 20 percent share in Chrysler to 35 percent.

According to Corriere, Fiat would drop its current 85 percent ownership stake down 51 percent of Ferrari, which is worth $3.1 billion.



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