The Ferretti Group, the parent company of CRN, Ferretti Yachts, Ferretti Custom Line, and five other Italian yacht and megayacht brands, formally announced it is being acquired by China-based Shandong Heavy Industry Group.
The announcement confirms rumors last month that the Ferretti Group may sell to the Chinese manufacturing company. According to the formalized deal, Shandong Heavy Industry Group, a.k.a. SHIG-Weichai Group, is spending €374 million ($477.8 million) to acquire controlling interest from Ferretti Group’s creditors. Specifically, the sum is comprised of debt financing of €196 million (about $250.6 million) and an equity investment of €178 million (about $227.6 million). When finalized, SHIG-Weichai Group will have a 75-percent stake.
The remaining 25-percent interest will be held by the existing creditors, which include Royal Bank of Scotland Group, Strategic Value Partners, and Oaktree Capital Management. Together, they are spending €25 million ($31.9 million) as both an equity investment and debt-to-equity swap.
Once the deal is completed, the Ferretti Group’s debt will be reduced to €120 million ($153.3 million). While the Group did not specify what that debt previously has been, the Financial Times and other media reported last month that it was €685 million ($875.2 million).
While SHIG-Weichai Group is known for manufacturing construction machinery and other heavy-duty industrial products, it does have ties to the yacht business. In 2009 it acquired Moteurs Baudouin. The French firm designs and manufactures inboard diesel engines, gearboxes, propellers shafts, propellers, and gensets. Baudouin supplies ferries, trawlers, and pleasure yachts and is a member of the Superyacht France industry group.
With the acquisition of the Ferretti Group, SHIG-Weichai Group intends to keep all production in Italy and retain the present management team. It also intends to continue broadening international sales. According to Tan Xuguang, chairman of SHIG-Weichai Group, emerging markets like China are a particular focus, but so, too, are the already strong markets of Europe and the United States.