Ferrari to pay Fiat Chrysler $2.8 billion before spinoff

"Prior to the separation we also intend to enter into certain other transactions including distributions and transfers of cash from Ferrari currently estimated at 2.25 billion euros," FCA said today in a U.S. filing. FCA Chief Executive Officer Sergio Marchionne, who is also Ferrari's chairman, plans to list 10 percent of Ferrari in the second or third quarter next year and distribute Fiat Chrysler's remaining 80 percent holding to the London-based company's own investors. The move was intended to shore up efforts to raise about $5 billion to cut debt and invest in new models. Marchionne seeks to meld two regional carmakers into a single entity to challenge the likes of General Motors Co. (GM), Volkswagen AG and Toyota Motor Corp. (7203) The CEO said last month that Ferrari would distribute a dividend to its shareholders before the spinoff and that Fiat Chrysler plans to transfer some debt to the supercar maker. Fiat named JPMorgan Chase & Co., Goldman Sachs Group Inc., Barclays Plc and UBS AG as underwriters for a related $2.5 billion mandatory convertible bond, which will mature in 2016, according to the filing. Ferrari Vice Chairman Piero Ferrari owns the remaining 10 percent of the company. Source: Bloomberg