After the acquisition of the world’s largest luxury-yacht builder Ferretti Group by the China’s biggest bulldozer-maker Shandong Heavy Industry Group, the country has ventured into manufacturing of superyachts.
According to the report, the Shandong Heavy Industry Group-Weichai Group will purchase 75% of Ferretti stakes for 178 euros ($228 million). The report also highlights that the Royal Bank of Scotland Group Plc and Strategic Value Partners LLC will also buy 12.5% stakes of an Italy-based boatmaker, Folic.
Because of rising economic and boost in a number of millionaire households up to 31% in 2010, the state-controlled Shandong Heavy Industry looks for adding superyatchts to its construction and farming products. Such a significant step will help Ferretti to start its production with a breath of fresh air in China, which used to manufacture Riva boats for Brigitte Bardot and Sean Connery respectively. However, the production was disturbed because of ongoing financial crisis since 2008, which laid a way to the company’s bankruptcy.
Richard Tai, luxury- goods analyst at Shanghai-based research firm China Research & Intelligence said: “China’s super-rich are looking at yachts and jets because the country has a lot of money now.” He added: “It just shows China’s phenomenal economic development over the past 30 years.”
The contract signifies that Ferretti, which is engaged in the manufacturing of Ferretti, Pershing and Betram brand yachts, will hold its existing management as well as its headquarters and production facilities in Italy. Also, the company can set a price tag of more than $100 million on its yachts.
Tan Xuguang, Shandong Heavy’s chairman confirmed that deal will take three to six months to complete because it requires an official approval from Italian regulators. He said the company is controlled by Shandong province that includes the city of Qingdao, which is a major naval base and a host of 2008 Olympic sailing regatta.
According to the contract, Shandong Heavy, the units of bulldozer-maker Shantui Construction Machinery Co. and Hong Kong-listed engine-maker Weichai Power Co. will offer e198 million of debt financing to Ferretti. The company will also provide e100 million of new equity and a reduction of e100 million in Ferretti’s debt
Image Credit: Creativecommons/ NikoSilver