The family behind luxury yacht maker Ferretti Group has ended its involvement with the debt-laden family business by selling its stake to a Chinese machinery group.
Shandong Heavy Industry acquired 75% of the Forlì, Italy-based group, in a deal worth €374 million. The agreement will increase Ferretti’s capital by €100 million.
The remaining 25% stake will be distributed between the group’s major creditors, including private equity firms Oaktree Capital and Strategic Value Partners – which together own about 60% of the company’s debt – and Royal Bank of Scotland, which owns an additional 12%.
Ferretti, which makes brands such as Pershing, Itama and Riva as well as Ferretti Yachts, was hit by the global economic downturn and accumulated debt of about €580 million.
But despite Ferretti's struggles, Shandong Heavy Industry’s decision seems to be strategic, as China's luxury market is booming and demand for yachts is expected to increase.
“China is one of the most rapidly developing countries for the yachting sector and has great potential for the coming five to 10 years,” Ferretti Group chairman Norberto Ferretti said in a statement released on 10 January.
Ferretti Group was founded by brothers Alessandro and Norberto Ferretti in 1968. Until the sale, Norberto and the group’s management owned about 38% of the company but controlled 100% of its voting rights.