Ferretti finalises €550m ‘haircut’

The luxury yacht-maker will continue trading under the ownership of founder Norberto Ferretti and its lenders. Candover and Permira, who had until recently owned over 60% of the firm, are out.

The luxury yacht-maker and former portfolio company of Permira and Candover Ferretti has agreed terms with The Royal Bank of Scotland (RBS) for a financial restructuring that will see its debt burden reduced from about €1.1 billion to about €550 million.

Ferretti 881: yours for €5.5m

The business will also receive an €85 million capital injection, of which €70 million is coming from chairman and founder Norberto Ferretti and his management team and a further €15 million is coming from Italian institution Mediobanca.

Further credit facilities from RBS and three other banks amounting to almost €90 million will give the manufacturer more breathing space in the short- and medium-term.

UK-based buyout house Candover had owned a 50.2 percent stake in Ferretti before the restructuring, while fellow buyout firm Permira had held a 10 percent minority stake. Neither firms feature in the business’ capital structure going forward.

Candover acquired the majority stake in Ferretti from funds managed by Permira in October 2006 in a deal that reportedly valued the yacht-maker at €1.7 billion. Permira and the Ferretti management team reinvested the remaining 40 percent.

Ferretti, whose flagship product the 881 retails at over €5.5 million, was unable to service the €1.1 billion in debt as the super-cyclical market for luxury yachts declined and defaulted on a debt repayment in February.

Under its new capital structure, 38.5 percent of Ferretti’s equity is held by Norberto Ferretti and the group’s management, 8.5 percent by Mediobanca and 53 percent by senior and mezzanine lenders.