Shandong Heavy Industry Group-Weichai Group announced today that it reached agreements with the major creditors of the Ferretti Group to acquire a controlling interest in Ferretti by participating in Ferretti's debt restructuring.
“Developing the yacht business is one of the group's strategic goals for the next five years. Ferretti, which possesses iconic international brands, state-of-the-art manufacturing technologies, products of the highest quality and an extensive sales network, is an ideal partner with strong strategic values,” SHIG-Weichai Group chairman Tan Xuguang said in a statement.
“Ferretti's overall competitive advantages in production cost, sales channels, after-sales service and financial strength will be improved, creating a win-win situation that will allow Ferretti to consolidate its leading position in the luxury yacht market,” he added.
Through a total investment of 374 million euros, or about $476 million, SHIG-Weichai Group will acquire a 75 percent interest in the yacht builder after the completion of debt restructuring procedures. RBS and funds under the management of Strategic Value Partners will invest alongside SHIG-Weichai, and both will become 12.5 percent shareholders.
Through the acquisition, Ferretti's capital structure will be fully restructured with an equity capital increase of 100 million euros, or about $127 million, and total debts reduced to a reasonable level of about 100 million euros.
After the acquisition, the group will retain Ferretti's key management team, headquarters and production bases in Italy.
“We are very proud of this agreement with a prestigious partner such as SHIG-Weichai Group. We are strongly convinced that this partnership will lead to very satisfactory results and will provide Ferretti Group with a strong capital base that will allow the development of long-term growth plans,” Ferretti Group chairman Norberto Ferretti said in a statement. “Moreover, China is one of the most rapidly developing countries for the yachting sector and has great potential for the coming five to 10 years.”
Ferretti is the world's largest luxury yacht builder and has a global supply chain that includes more than 800 suppliers, as well as some of the world's most advanced yacht-building systems. Ferretti has eight yacht brands and owns a total of eight shipyards in Italy as well as in Miami, and employs nearly 2,000 people. The eight brands include Ferretti Yachts, Pershing S.p.A., Itama, Bertram Yacht, Riva S.p.A., Mochi Craft, CRN S.p.A. and Custom Line.
As a result of the combination of a relatively highly leveraged balance sheet and the continued lower demand levels for certain classes of luxury yachts, post-2009, Ferretti's operations have been affected and necessitated the partnership of SHIG-Weichai, RBS and Strategic Value Partners to assist Ferretti in restructuring its financial debts with a recapitalization, according to a statement on the acquisition.
SHIG-Weichai Group is an equipment manufacturing group offering a broad range of commercial vehicles, construction machinery and other heavy-duty industrial products. The group operates four main divisions: commercial vehicles, construction equipment, powertrain systems and auto parts.
SHIG-Weichai said it aims to facilitate Ferretti's entry into emerging markets such as Asia, with a particular focus on greater China, which will be an important growth engine for Ferretti's future development.
In addition, the group will provide a range of other resources, including capital support to Ferretti to stimulate rapid business development in the traditional European and American markets, as well as other emerging markets.