Ferretti Group sold to the Chinese?

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Ferretti Group sold to the Chinese?

Industry News

Europe’s financial press believes so...

DECEMBER 2011

The Financial Times, Bloomberg and other investment industry news publishers reported in mid-December that the Ferretti Group’s senior lenders – led by RBS, Strategic Value Partners and Oaktree Capital – have agreed to sell their interests in the group to China’s Shandong Heavy Industry, a manufacturer of construction equipment and agricultural machinery. As to the accuracy of these stories, the Ferretti Group’s PR department has neither confirmed nor refuted them, which is suggestive that there is indeed some substance to what has been published thus far. The origins of those stories are believed to be leaks from individuals close to the deal.
The reports suggest the deal with Shandong Heavy Industry will restructure the total the present debt burden from around €685 million or so to around €116 million, the new notes being held by the Industrial & Commercial Bank of China, which will also provide a credit line of around €80 million.
Shandong Heavy Industry’s interest in the Ferretti Group first became public knowledge during the summer when it was announced that the two operations had signed a MOU (memorandum of understanding) with regard to a joint venture that would encompass the construction of Ferretti Group yachts in China.
We understand Shandong Heavy Industry is being advised by investment banks Houlihan Lokey and Citigroup.
The Ferretti Group has been crippled by its debts ever since late ’06, when around 60 per cent was acquired by private-equity fund Candover; that ill-advised deal valued the yachtbuilding giant at around €1.7 billion. A restructuring a year later saw the senior and mezzanine debts halved from €1.1 billion to €550 million, but the severity of the financial crisis and the subsequent contraction of the group’s markets made even that huge write-off untenable.
This latest deal is said to value the company at nearer €220 million. It turnover is presently around €545 million.
The picture shows Ferretti Group president Norberto Ferretti (right) and sales and marketing director Lamberto Tacoli (left).

For more, www.ferrettigroup.com

© Phil Draper