By Scott Murdoch and Valentina Za
SYDNEY/MILAN (Reuters) -Italian luxury yacht maker Ferretti Group launched a Hong Kong initial public offering on Monday that values the company at up to $1.2 billion, a term sheet seen by Reuters showed, going ahead despite volatility in global equity markets.
Ferretti, whose customers include British fashion designer Jimmy Choo and former football star David Beckham, is a market leader for yachts measuring at least 80 feet, with a price tag ranging from 4 million euros ($4.4 million) to more than 20 million.
Downplaying risks to the group from the Ukraine war and ensuing sanctions against Russian oligarchs, Ferretti has said it has no exposure to mega- and giga-yachts chiefly hit by the measures. Fully customised superyachts measuring more than 100 feet account for only 9% of group revenues.
Braving choppy markets after a failed IPO attempt in 2019, Ferretti plans to sell 83.58 million shares, or around 25% of its total equity capital, to raise up to $301 million, according to the term sheet.
That entails a valuation of $932 million-$1.2 billion, with shares to be priced at HK$21.82 to HK$28.24 each, the term sheet showed.
Ferretti expects the value of the global yacht market to grow on average 7% a year, reaching 27 billion euros in 2025, with demand strengthening particularly in the Asia Pacific region, thanks also to tax breaks in China, an investor presentation seen by Reuters showed.
Building on 2021 revenues of 900 million euros, Ferretti plans to use most of the IPO proceeds to grow its core manufacturing business, adding new models, and to boost side services such as after-sales assistance or yacht chartering.
Ferretti, whose brands include Riva, Pershing and Wally, is owned by Chinese conglomerate Weichai Group.
Piero Ferrari (NYSE:RACE), son of the eponymous luxury sports car company's founder Enzo Ferrari, owns 11% of the company and sits on the board.
Five Chinese cornerstone investors have subscribed for $129.5 million worth of stock in the issue.
The 54-year-old company runs six shipyards in Italy and competes with family-owned Sanlorenzo, which listed https://www.reuters.com/article/us-italy-sanlorenzo-idUSKBN1YA0PP in Milan in 2019.
Shares in Sanlorenzo, which has also downplayed the hit from the Ukraine crisis, touched a 17-month low this month, before regaining some ground.
Hong Kong's Hang Seng Index has see-sawed in the past week but remains down nearly 9% for the year.
The value of Hong Kong IPOs in the first quarter tumbled to $837.4 million from $11 billion at the same time in 2021, Refinitiv data showed.
The final price of Ferretti's shares is due to be set on Friday and the stock will start trading on the Hong Kong Stock Exchange on March 31.
($1 = 0.9065 euros)