Ferretti sets course for China, India

Italian luxury yacht maker Ferretti Group is looking for partnerships in China and India after restructuring its 1.1 billion euros debt last year, its CEO said, adding sales could return to pre-crisis levels in 2013-14.

Founded 42 years ago by chairman Norberto Ferretti, the group agreed a debt-for-equity swap and a 85 million euro ($117.1 million) capital increase last year, after being hit hard by the credit crisis, which saw many of its wealthy clients lose financing and cancel orders.

In an interview at the International Boat Show in Genoa, Chief Executive Salvatore Basile said Ferretti ended the year in August with revenues of 500 million euros, in line with targets, helped by reorganization and cost reduction.That compared with 900 million euros in 2008, the company’s peak year.

The group, whose custom-designed CRN megayachts can exceed 80 meters and sell for up to 40 million euros, closed the year with an EBITDA of 30 million euros, up 15 percent from 2009.

Basile said he was in talks with potential partners in China, and aimed to enter India. As part of its expansion in emerging markets, the group has just set up a company with Brazilian firm Spirit to provide sales services in Brazil.

“I have always believed in the Chinese market because there is still lot to do there. Finding an important partner would help us,” Basile said.

BUBBLY YEARS

Basile said the group could return to pre-crisis revenue levels in four years.

“If we have to talk about pre-crisis levels, we have to refer to 2005-2006. I think we could reach those levels between 2013 and 2014,” said the 58-year-old Basile, who was hired last year after the debt restructuring with banks.

Ferretti halved its debt to 550 million euros from 1.1 billion euros in 2009.

In the 85-million euros capital increase, Chairman Norberto Ferretti and some of the managers injected 70 million euros, while Mediobanca (MDBI.MI) took up the other 15 million euros.

Basile said it was premature to say when the group, which delisted in 2003, would consider returning to the stock market.

“There is a moment for repaying the debt, a moment when we can think about floating again or about other options,” he said.

He said the group, which makes a wide range of yachts under its eight brands including Pershing, Riva and Itama, was aiming to sell non-strategic assets such as a property near its U.S.-based Bertram Yacht unit, which makes sport-fishing boats.

Ferretti sold niche unit Apreamare to focus on medium and large yachts early this year, and media speculated it could dispose of other entry-level brands.

Reuters

Tags: China, Ferretti Group, India

Category: Shipyard News