* Considering Chinese brand acquisition in 12-18 months
* Eyeing IPO in Asia stock market in 3-4 years
* Shandong Heavy owns 75 pct of Ferretti
By Antonella Ciancio
MILAN, Nov 6 Ferretti, the Italian luxury yacht
maker favoured by Chinese tycoon Li Ka-shing and Italy's
Fiat-owning Agnelli dynasty, may expand into smaller boat
building in China to meet growing demand from the country's
newly-affluent middle classes.
The group, controlled by China's state-owned Shandong Heavy
Industry Group, is looking to add 6-8 metre pleasure boats to
its range of customer-designed mega-yachts popular with the
Ferretti would manage production of the boats following the
acquisition of a Chinese brand over the next 12-18 months, Chief
Executive Ferruccio Rossi told Reuters in an interview.
"With our know-how and support by our majority shareholder
we are considering entering the so-called recreational segment
and make smaller boats for the Chinese middle class through a
local brand and a local manufacturing plant," he said at the
launch of Ferretti's first megayacht under the smaller-sized and
glamorous Riva brand.
Ferretti, taken over by Shandong Heavy in a 374 million-euro
deal in January, owns eight brands including Ferretti Yachts,
Pershing, Itama and Bertram.
Rossi said the group was also considering an initial share
offering in Asia on the heels of Italian fashion group Prada's
IPO last year, Rossi said.
"Maybe in three to four years we could list on an Asian
market to gain further visibility," Rossi said. "I very much
like the experience of Prada and we are looking at it closely."
"There could be a dual listing but it's premature to think
about this now."
Ferretti, which competes with smaller Italian peer Azimut
Benetti, floated on the Milan stock exchange in 2000 following a
string of acquisitions and delisted two years later.
It has said it would keep jobs and manufacturing in Italy,
which has long dominated the yachting industry.
But a protracted recession and a fiscal clampdown have hurt
domestic sales of luxury goods, Rossi said, and the company has
temporarily laid off workers at one of its Italian yards.
The global yacht market is expected to grow by 2 percent in
2012 from 5 percent last year, luxury body Altagamma said.
Rossi said Ferretti would continue to produce in Italy,
where it aims to break even in the second half of 2013.
Shandong Heavy Industry Group controls four groups with
stock listings in Hong Kong, Shanghai or Shenzhen: Weichai Power
, Weichai Heavy Machinery,
Yaxing Motor Coach Company and Shantui Construction
It plans to invest nearly 200 million euros in Ferretti,
after an initial equity investment of 178 million euros for a 75
percent stake and 196 million euros of debt financing.
Former creditors Royal Bank of Scotland and hedge
fund Strategic Value Partners own the remaining 25 percent.
Ferretti is not alone in finding itself owned by investors
from emerging markets taking advantage of Europe's financial
woes to pick up brands and establish themselves as global
Private equity fund Permira, a former shareholder in
Ferretti, sold fashion house Valentino to the Qatari royal
family for around 700 million euros in July.
Ferretti makes around half of its sales in Europe, 15
percent in Asia-Pacific, and 35 percent in the Americas.
The company aims to make one third of revenues in each
region by 2018.
For a Reuters Breakingviews commentary on the Ferretti
takeover, click on: