Fiat Plans To Float Ferrari

Fiat registered a loss of 529 million Euros, considerably worse than anticipated, compared to a profit of 193 million Euros for the same period in 2001. Much of this loss was put down to poor road car sales, some 11.2 percent down on last year.

Paolo Fresco, executive chairman of Fiat, announced the plan to list Ferrari at its AGM in Turin. "We expect these two transactions to generate proceeds of at least 1 billion Euros," he said, "And in the case of Ferrari, a large capital gain."

Although Fiat will retain control of Ferrari after the listing, there are suggestions among experts that the parent company may be forced to sell Fiat Auto, its core car-making business, to General Motors. GM already own 20 percent of Fiat Auto, and there is an agreement in place allowing Fiat to sell its subsidiary entirely to the automotive behemoth.

Fiat owns 90 pecent of Ferrari Maserati Sport and Racing Cars, with the remaining 10 percent remaining in the hands of the Ferrari family.

The float will have no immediate effect on the Ferrari Formula 1 team. However, any future sell-off to GM may change the situation, as the company would have to integrate the F1 project into its own motorsport portfolio.

Ferrari and Maserati president Luca di Montezemolo welcomed the news. "Today's announcement of the decision taken by the board of Fiat SpA and Ferrari SpA is very important," he said. "It does in fact offer new resources for development projects for Ferrari and Maserati, which will contribute still further to the growth and success of the Ferrari and Maserati group, our partners, our customers and our fans."