JINAN, China, Jan. 10, 2012 /PRNewswire-Asia/ -- Shandong
Heavy Industry Group-Weichai Group ("SHIG-Weichai
Group" or "the Group") announced that it has reached agreements
with the major creditors of the world's largest luxury yacht maker,
the Italian company Ferretti Group ("Ferretti"), to acquire a
controlling interest in Ferretti by participating in Ferretti's
debt restructuring.
(Photo: http://photos.prnewswire.com/prnh/20120110/HK33143 )
Through a total investment of 374 million
euros, including equity investment of 178 million euros and provision of debt financing
of 196 million euros, SHIG-Weichai
Group will acquire a 75% interest in the yacht maker after the
completion of the debt restructuring procedures. RBS and funds
under the management of Strategic Value Partners will invest
alongside SHIG-Weichai and both become 12.5% shareholders. Through
the acquisition, Ferretti's capital structure will be fully
restructured with equity capital increase by 100 million euros and total debts reduce to a
reasonable level at around 100 million
euros. The business will enjoy a strong capital base which
will help drive its long-term development plans.
Mr. Tan Xuguang, Chairman of SHIG-Weichai Group, said
"Developing the yacht business is one of the Group's strategic
goals for the next five years. Ferretti, which possesses iconic
international brands, state-of-the-art manufacturing technologies,
products of the highest quality and an extensive sales network, is
an ideal partner with strong strategic values. Through the
acquisition, the Group will cooperate closely with this
world-renowned yacht maker, providing Ferretti with new channels to
market and capital support as well as other resources with which it
can expand more effectively into emerging markets, a key area of
potential growth for Ferretti. Synergies between the Group and
Ferretti can be unleashed through the sharing of resources and
industrial integration. Ferretti's overall competitive advantages
in production cost, sales channels, after-sales service and
financial strength will be improved, creating a win-win situation
that will allow Ferretti to consolidate its leading position in the
luxury yacht market."
Mr. Norberto Ferretti, Chairman
of Ferretti Group, declared "We are very proud of this agreement
with a prestigious partner such as SHIG-Weichai Group. We are
strongly convinced that this partnership will lead to very
satisfactory results and will provide Ferretti Group with a strong
capital base that will allow the development of long-term growth
plans. Moreover, China is one of
the most rapidly developing countries for the yachting sector and
has great potential for the coming 5 to 10 years."
John Davison, RBS Global Head of
Strategic Investment, said "RBS has a longstanding relationship
with Ferretti Group and have a very high regard for the business
that Norberto has built. We are delighted to have the opportunity
to invest alongside SHIG-Weichai in Ferretti and look forward to a
very successful partnership with SHIG-Weichai and continuing our
relationship with Ferretti."
Ferretti, the world's largest luxury yacht manufacturer, boasts
some of the world's most advanced naval research and development
centers (AYT -- Advanced Yacht Technology) and a team of architects
and designers (Centro Stile). It also has a comprehensive global
supply chain which includes more than 800 suppliers, as well as
some of the world's most advanced yacht manufacturing systems.
Ferretti has eight highly regarded and recognized yacht brands and
owns a total of 8 shipyards in Italy as well as in Miami, USA,
and employs nearly 2,000 people. As a result of the combination of
a relatively highly leveraged balance sheet and the continued lower
demand levels for certain classes of luxury yachts post 2009,
Ferretti's operations have been affected and necessitated the
strong partnership of SHIG-Weichai, RBS and Strategic Value
Partners to assist Ferretti in restructuring its financial debts
with a recapitalization.
SHIG-Weichai Group is one of the most competitive equipment
manufacturing groups in China
offering a broad range of high quality commercial vehicles,
construction machinery and other heavy-duty industrial products.
The Group operates four main divisions, namely commercial vehicles,
construction equipment, powertrain systems and auto parts, which
have a global leading position in terms of production scales and
capabilities. In addition to its solid market foundation in
China, the Group has also been
active in the overseas markets. In 2009, the Group acquired Moteurs
Baudouin SA ("Baudouin") in France
through its subsidiary Weichai Power Co., Ltd. ("Weichai Power"),
which has helped the Group expand into the international high-end
marine engine business. After the acquisition, Weichai Power has
invested an accumulated over 30 million
euros and implemented multiple measures to improve
Baudouin's businesses and operations. Several objectives were
achieved including the expansion of production scale, the
enhancement of its R&D capabilities, as well as the recruitment
of local employees. The sales volume of Baudouin's engines has
increased from 74 units in 2009 to 352 units in 2011. The staff
numbers has risen from 120 in 2009 to 202 in 2011, playing a vital
part in establishing Baudouin's leading position in the marine
power market.
Leveraging its ample resources, SHIG-Weichai aims to facilitate
Ferretti's entry into emerging markets such as Asia, with a particular focus on Greater China, which will be an important
growth engine for Ferretti's future development. In addition, the
Group will provide a range of other resources including capital
support to Ferretti to stimulate its rapid business development in
both the traditional European and American markets as well as other
emerging markets. After the acquisition, the Group will continue to
uphold its general principle of "Unified strategy, sharing
resources and independent operations" and will retain Ferretti's
key management team, headquarters and production bases in
Italy.
The global yacht market has been in decline since the financial
crisis in 2008. The recent market condition is facing unprecedented
challenges to the yacht industry around the world, causing an
industry consolidation that has resulted in some of the world's
largest yacht companies seeking new business partners and
shareholders. Meanwhile, yacht sales in emerging countries such as
the BRICs have continued to grow rapidly. For example, China's yacht imports have increased threefold
from 2009 to 2010. Industry experts anticipate great potential in
China's luxury yacht market in the
next 5 to 10 years as the popularity of yachting increases as a
recreational activity among China's growing middle class.
Citigroup, Holihan Lockey and ICBC International acted as joint
financial advisors to SHIG-Weichai Group in relation to this
transaction. King & Wood, Bonelli Erede Pappalardo and Akerman
Senterfitt acted as legal advisors to SHIG-Weichai Group.
Rothschild and Ernst & Young acted as financial advisors to
RBS and Strategic Value Partners. Ashurt and Clifford Chance acted as legal advisors to RBS
and Strategic Value Partners.
About Shandong Heavy Industry Group-Weichai
Group
Shandong Heavy Industry Group Co., Ltd. is one of the most
competitive and comprehensive equipment manufacturing groups in
China, with quality and complete
commercial vehicle and construction equipment industrial production
chains. In 2010, the Group recorded operating income of
RMB107.6 billion. The Group runs four
main businesses, namely commercial vehicles, construction
equipment, powertrain systems and auto parts. Several of the
Group's products rank No.1 in terms of market share in China, including bulldozers, heavy-duty diesel
engines, heavy-duty transmission and axles, spark plugs,
medium-speed marine propulsion systems and industrial power
generation equipment. The market share of the Group's heavy-duty
vehicle ranks No. 4 in China. The
Group has four listed companies, namely: Weichai Power
(2338HK/000338SZ), Weichai Heavy Machinery (000880SZ), Yaxing Motor
Coach Company (600213SH) and Shantui Construction Machinery
(000680SZ).
Weichai Holding Group Co., Ltd., the largest wholly-owned
subsidiary of Shandong Heavy Industry Group, was founded in 1946.
It is one of the largest and most competitive heavy-duty vehicle
and powertrain system companies in China. The Group employs over 40,000 people
worldwide. In 2010, the Group recorded operating income of
RMB91.1 billion. It ranks
93rd among the Top 500 Chinese Enterprises, 35th among
the Top 500 Chinese Manufacturers and 7th among the Top 500 Chinese
Machinery Manufacturers. In 2011, it has won "The Grand Award of
China Industry", a recognition of its management standards and
operational quality against international benchmarks.
Ferretti Group
The Ferretti Group is one of world leaders in the design,
construction and sale of motor yachts with a unique portfolio of
some of the most exclusive, prestigious brands in the nautical
world: Riva, Ferretti Yachts, Ferretti custom line, Pershing,
Bertram, Itama, Mochi Craft and CRN.
The Group has always been at the very heights of the pleasure
boating market due to constant product and process innovation,
continuous research and development and cutting-edge technological
solutions. The extensive range of yachts on offer is designed by
highly specialized technicians and engineers at AYT -- the Ferretti
Group Advanced Yacht Technology, one of the most advanced naval
research and design centers in the world, which liaises with the
Centro Stile, an expert team of architects and designers who
continuously research aesthetic, functional and innovative
solutions, and are built at the Group's modern production units in
Italy and the USA. The Ferretti Group, founded in 1968, is
also present in the United States
through Ferretti Group America, which operates a network of
Ferretti Group Sales Centers specializing in the sale and marketing
of the Group's luxury yacht brands throughout the North American
market. The Group also has a presence in Asia, with a branch of representation and
promotion in Shanghai. Overall the
Group is represented by an exclusive network of around 60 carefully
selected dealers globally with a presence in over 80 countries,
thereby ensuring valued clients receive the very best assistance in
marinas all over the world.
SOURCE Shandong Heavy Industry Group-Weichai Group