Italian Yacht Maker Ferretti Floats Shares in Hong Kong

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Company is majority owned by Weichai Group, a Chinese machinery maker

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Still, shareholders for the Chinese-backed company pushed ahead with the listing so it could “get the resources in order to grow even more and even faster,” Alberto Galassi, the company’s chief executive officer, said.

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Asia’s rising importance as a wealth center helped prompt Ferretti, whose biggest superyachts can be more than 300 feet long and cost upward of $33 million, to pick Hong Kong for the listing. “Wealth now in Asia Pacific is higher than Europe,” Mr. Galassi said.

The deal was only modestly oversubscribed and cornerstone investors bought 53% of the shares sold. Cornerstones are big institutional investors who often support Hong Kong IPOs by committing to buy stock wherever a deal prices.

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Ferretti stock priced at 22.88 Hong Kong dollars a share, the equivalent of $2.92 and near the bottom of its indicative range. Shares closed 0.1% lower at HK$22.85.

Ferretti’s majority shareholder is Weichai Group, a machinery maker ultimately controlled by the government of China’s Shandong province. Mr. Galassi said Weichai, who bought a controlling stake in the yacht maker in 2012, had influenced Ferretti’s choice of listing venue.

The company’s financial performance has been improved as the pandemic has receded. For the first nine months of last year, Ferretti reported a profit of 32.1 million euros, equivalent to about $36 million, and up more than fivefold from a year earlier. Revenue rose 63% to €693.3 million.

In its prospectus, the company said it was not building any yachts for Russian oligarchs, and sales to Russian and Ukrainian customers had accounted for less than 3% of revenue in recent years.

In 2019, Ferretti tried to go public in Milan but eventually scrapped the deal amid market turbulence caused by haggling over Britain’s plans to exit from the European Union. Mr. Galassi cited valuation issues and a mainly European pool of investors, with very limited participation from prospective shareholders in the Asia-Pacific region.

Founded in 1968, Ferretti is only the second Italian company to list in Hong Kong, after the fashion house Prada SpA in 2011. The Ferrari family holds a minority stake in Ferretti, and Piero Ferrari, vice chairman and minority shareholder in the luxury car maker of the same name, is also vice chairman at Ferretti.

Many Chinese state-owned companies in recent years have acquired assets overseas and have been looking to capitalize on those investments through IPOs, said Corey Zhang, a Hong Kong-based partner at King & Wood Mallesons.

“The Ferretti listing would pave the way for more such deals to happen in Hong Kong,” Mr. Zhang said. King & Wood Mallesons advised the banks that handled the deal.

Under Chief Executive Officer Nicolas Aguzin, who took the role last year, Hong Kong Exchanges & Clearing Ltd.

has ambitions to attract more listings from companies that aren’t based in the city or in mainland China. Shares in nearly 200 international companies are already listed in Hong Kong, Mr. Aguzin said Thursday.

So far this year, Ferretti and other companies have raised a total of about $1.3 billion from Hong Kong IPOs, down from $10.9 billion in the same period last year, according to Dealogic.

The Ferretti deal is one sign the market for IPOs and other share sales could be thawing. Another is the recent $1.1 billion offering of stock by Hong Kong-listed JD Logistics Inc.

to its parent company JD.com Inc.

and outside investors. JD Logistics said the proceeds would fund growth and potential takeovers.

The JD Logistics offering “shows the market deals are still getting done,” said Kenneth Ho, head of equity capital markets at Haitong International,

which was one of the placing agents for the deal.

Write to Dave Sebastian at [email protected] and Jing Yang at [email protected]

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Credit: www.Businesshala.com /

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