Ferretti suffers financial woes

by Media Services on 25 Feb 2009 Bloomberg financial commentators report that Ferretti yachts has missed an interest payment on 1.08 billion euros ($1.4 billion) of senior loans from the Royal Bank of Scotland used to finance its buyout in 2007. At the end of last month Ferretti did not make a 1.4 million euro payment.

Ferretti has released a statement saying that the payment is related to an interest-rate swap on the senior loan and that it only failed to pay interest on the debt's 200 million- euro lesser 'mezzanine' loans.

Ferretti, which owns Pershing, Riva and CRN creates some of the most luxurious and expensive yachts and mega-yachts in the world. Since the downturn, its sales have declined.

Currently London-based Candover owns 50.2 percent of the company as a result of the LBO, while Ferretti's management holds 39.1 percent and Permira Advisers LLP, another London-based private equity firm, has 10.7 percent.

The yachtmaker's senior loans traded at 22 percent of face value at the end of last week and the Financial Times has said that Ferretti has stopped production at Pershing sending 270 workers home for 15 days from the production site in Fano.

It's a startling turn around for Ferretti which was planning its new public offering on the stock exchange just a few months ago. Orders for the larger boats Ferretti makes continue to come in but the fall-off in orders for the mid-range yachts has been swift.