MILAN: Fiat Chrysler Automobiles plans to list a 10 percent stake in luxury brand Ferrari and issue $2.5bn in convertible bonds to help fund the parent company’s turnaround plan. The newly-created FCA, which listed shares in New York earlier this month, wants to invest $61bn over the next five years in a bid to catch industry leaders such as Volkswagen and Toyota, and some analysts have questioned whether it can afford that much given tough markets. “They seem to have sorted out their capital worries in one go,” Roberto Lottici, a Milan-based fund manager for Ifigest, said. He added that a spin-off of the famed Ferrari sports car brand should help to boost FCA’s valuation. Milan-listed shares in FCA, the world’s seventh-largest carmaker, jumped more than 18 percent to trade at €9.03 yesterday, their highest level since April 23 and outperforming a 0.2 rise in Milan’s blue-chip index. “It looks to me like they’ve packaged the Ferrari deal as a pill to help sell the convertible (bonds) after results that were far from overwhelming,” Lottici added.
Earlier yesterday, FCA reported a 7 percent rise in third-quarter operating profit to $1.18bn. This included one-off expenses of €36m. Revenues were up 14 percent to €23.6bn. Ferrari could have an equity value of between €5bn and €5.8bn, according to brokers. FCA said it would list the 10 percent stake in the United States and possibly on a European exchange, hoping to complete the spin-off next year. Its remaining 80 percent stake would be distributed among FCA shareholders, who include Fiat’s founding Agnelli family. Ten percent of Ferrari is held by Piero Ferrari, the group’s vice chairman and son of the carmaker’s founder Enzo Ferrari. FCA also said it would issue so-called mandatory convertible bonds, which will have to be converted into FCA shares on maturity. Investors in the bonds will also get subscription rights for the Ferrari shares being listed. Reuters
Chrysler recalling 381,876 Ram trucks
DETROIT: Fiat Chrysler Automobiles NV’s Chrysler Group said it is recalling 381,876 Ram trucks mostly in the United States to correct a potential fire hazard. Chrysler said in a statement that problems with 2010-2014 Ram 2500 and 3500 pickups and 4500 and 5500 chassis cabs equipped with Cummins diesel engines could cause fuel-heater housings to overheat and fuel to leak. It said 314,704 of the trucks are in the United States, 59,432 in Canada and the rest outside North America. Chrysler said it was not aware of any accidents or injuries related to the condition. Separately, the automaker is recalling 184,186 Jeep Grand Cherokee and Dodge Durango SUVs from model year 2014 to upgrade software that manages the vehicles’ electronic stability control system. Chrysler said the system could be accidentally disabled. No accidents or injuries have been reported. Reuters
Ford recalls Edge and Lincoln crossovers
DETROIT: Ford Motor Co said it will conduct a regional recall of 204,448 Ford Edge and Lincoln MKX crossover vehicles to correct an issue that could cause a fire. The 2007-2008 models have fuel tank reinforcement brackets that could become corroded, which in turn could result in a fuel leak and a possible fire, Ford said. The automaker said it is aware of one fire related to the issue, with no accidents or injuries. The vehicles are being recalled in 22 US states, most of them in the Northeast and upper Midwest, and six Canadian provinces, from Ontario to Nova Scotia. Reuters
