Fiat CEO Sergio Marchionne firmly dismissed recent talk that a Ferrari IPO is on the cards for this year. "Listing is not on my agenda for the entire 2006, after that we will see" Reuters reported Marchionne as saying in response to reporters questions during the investor launch of the Fiat new bond issue last week. Speculation has gathered about a possible Ferrari stockmarket share placement this year as sources within minority shareholder Mediobanca have been giving off the record briefings that they are keen to see Fiat to roll out an IPO, allowing them to divest themselves of the stake in the Prancing Horse they took up in 2002.

Fiat diluted their stake in their Ferrari unit to 56 pct when they raised funds three and a half years ago to keep the then struggling carmaker afloat. Mediobanca then headed a consortium of banks who took up a stake in Ferrari with the promise that a following IPO would allow them to divest themselves of their stake.

Since then the scenery within Fiat has changed. Ferrari President Luca di Montezemolo, who was the main driving force behind the planned IPO which was shelved several times, has since been promoted to Chairman of the Fiat Group, and after five year of making losses Fiat's Auto Division turned in a 21 million euro profit in the last quarter of 2005, ending at a stroke the financial burden that the automobile sector has been to the group.
 

Early last year also saw the burdensome Maserati brand being switched away from Ferrari's responsibility and back to Fiat Auto, ending the unsustainable drain on Ferrari's financial resources that reinventing the Trident brand had become.

Mediobanca also downsized its Ferrari shareholding to 11.7 pct last July when the Mubadala Development Company, a principal investment company wholly owned by the Government of Abu Dhabi, bought a 5 pct share. The deal saw Mubadala paying 114 million euros for the stake, valuing Ferrari at 2.28 billion euros. Last week influential Italian newspaper Il Giornale quoted well-placed sources in Fiat as stating that an IPO no longer figured in Marchionne's plans for the Fiat Group, and he fully expected Ferrari increase its profits now that Maserati was no longer draining cash. Reuters reported a Fiat source yesterday as saying that they would help Mediobanca find an investor for its stake if it wished to bale out.

Marchionne made the Ferrari IPO comments during the announcement of Fiat new bond issue, which is expected to raise around 750 million euros. "Fiat Announces Plans to Issue a benchmark seven year Euro bond Fiat announced today that it intends to offer, subject to market and other conditions, a benchmark seven year Euro bond," read a statement from Fiat. "The size and price of any offering will be determined on the basis of market conditions. The notes are to be issued by Fiat Finance and Trade Ltd. société anonyme, a wholly-owned subsidiary of Fiat S.p.A., and guaranteed by Fiat S.p.A. Fiat expects to make an application for the notes to be admitted to the Official List of the Irish Stock Exchange and traded on its regulated market. The notes will only be offered and sold outside the United States to institutional investors that are non-U.S. persons under Regulation S and have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any other securities laws. The notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Net proceeds of any offering are to be used for general corporate purposes, including the potential refinancing of the Fiat Group’s existing debt." the statement concluded.