Home » Weichai to offload Ferretti stocks ahead of Milan listing

Weichai to offload Ferretti stocks ahead of Milan listing

The Chinese group, which owns nearly 64% of the Italian shipbuilder, will sell almost half of its stake before the Hong Kong-listed title goes for Italy’s main stock exchange too. It’s about making Ferretti more palatable to Western markets, just as other major Italian companies – namely Pirelli – seek to de-risk from Beijing

Less China in Italian shipbuilder. Ferretti Group, a leading yacht maker listed on the Hong Kong stock exchange, is going for its second listing in Milan. And in the lead-up to that move, China’s Weichai Group, (which owns 63,75% of it) has agreed, and was authorised, to sell almost half of its stake – 28,75% of total shares.

  • Ferretti is now ready to debut with an Italian IPO, pending the relevant authorisations. And the Italian government might decide to take a closer look amid growing attention towards China’s moves in the Italian economy.

Think de-risking. In an official note, Ferretti said that “Asia remains strategic,” but it believes the Milan listing would allow it “to broaden the composition of its shareholder base in certain regions, such as Europe, the Middle East and the Americas, which are the group’s main markets.” By doing this, the company expects to “improve the liquidity and profile of the company’s shares in the global market.”

  • There’s an inescapable connection with the Western economies’ growing drive to de-risk from Beijing to counter the systemic challenges it poses – such as non-market practices, chokeholds in the greentech supply chain and espionage risks.
  • In this light, it’s possible Weichai elected to dilute its ownership of Ferretti to avoid triggering the Italian government’s so-called Golden Power (wielded to protect the nation’s assets from undue influence), which would end Ferretti’s attempt to list in Milan.

The Pirelli case… The government’s intervention would be far from being unheard of. In fact, Giorgia Meloni’s executive is reportedly considering whether to activate the Golden Power in relation to Pirelli, a leading Italian tyremaker, to reduce the influence of Sinochem, which owns 37% of the company and is controlled by Beijing’s powerful State Council.

  • Word on the street is that Italian authorities are discussing several options with Pirelli officials, one of them being “limiting information sharing on sensitive and strategic technology with Sinochem-appointed board members.”
    • Pirelli is still waiting for the government to take a decision in view of the upcoming renewal of the pact with Sinochem.
  • Another crucial dossier awaits the executive’s intervention – that concerning CDP Reti, which manages equity investments in infrastructure and utilities companies Snam, Italgas and Terna and whose 35% is in the hands of the Chinese public giant State Grid Corporation of China.

… and the bigger drive. Rome is more mindful of its economic interests: Golden Power use has grown exponentially over the past years, as the governments went from flagging 83 operations in 2019 to nearly 496 in 2021. Contextually, Italy has been distancing itself from China – and it’s in the process of deciding whether to drop its membership in the Belt and Road Initiative.

  • The Meloni government has signalled it’s inclined to exit the BRI, though the decision hasn’t been taken yet. And in the recent G-7 meeting, Western partners agreed on improving “economic security” – another prong of the West’s de-risking drive.

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