Ferrari Has More Face Value In IPO, Says The Chief Of Fiat

By By: Vicky.in

Published: Wednesday, April 20, 2011, 13:45 [IST]

The CEO of Fiat has some good defends on the value aspects of Ferrari and has suggested the bankers to pursue it to worth of 5 billion euros. For him Ferrari brands are sacred and hence they are peculiar and claimed that in next month the company will be delivering the first family car FF 4-seater for 359000 US dollars. The car has proved to be the most profitable unit as of now. The Italian car maker fetched a profit range of 302 million euros from the net revenue of 1.92 billion euros on pre-interest and taxes thereby making a rise of 23%.

The CEO estimates that Ferrari market value to be worth 2 billion euros more than the projections but will share 63% of Fiat"s net market value worth 8 billion euros. The Italian car maker has the right for Fiat brand cars and 30% in Chrysler Group, in addition to shares in Maserati, Alfa Romeo and Lancia brands. The CEO is said to have pleaded the bankers to increase the credit rate for Ferrari. The rating in Italy for Fiat has come down after the unprecedented fall in its industrial operations in car segment. Standard & Poor"s has hinted that the rate of Fiat may still fall if the company took stake more in Chrysler.

But the CEO has some other thought and claims that Fiat can still manage with the stake of Chrysler shares. The financial stability of Fiat during 2010 stood at 12.2 billion euros cash and cash equivalents with the net industrial debts at 542 million euros. But the company reduced 50% of its debts prior to the withdrawal of industrial dealings.

Given on the current projection the company will face further hike in its debts this year, between 1.5 billion euros and 1.8 billion euros while its capital expenditures may rise to 4.5 billion euros. On the otherhand, Ferrari has the market value of 3 billion euros ( 10 times the operating profit) and is deemed as the trophy asset inside Fiat by the Deutsche Bank.

Article Published On: Wednesday, April 20, 2011, 12:35 [IST]

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