By Scott Murdoch and Valentina Za

SYDNEY/MILAN – Ferretti, the luxury Italian yachtmaker, will begin listing its Hong Kong shares on Monday. The process aims to reach a valuation around $1billion as it sells a 25% share, according to two people familiar with the matter.

Ferretti is owned by the Chinese conglomerate Weichai Group. However, the conflict in Ukraine has roiled financial markets and impacted shares in the superyacht industry.

Friday is the end of the pre-marketing phase. The company could change plans depending upon the market, having abandoned a Milan IPO in 2019.

Ferretti sought to minimize the negative impact that international sanctions on Russian oligarchs have had on its business. According to Ferretti, less than 3% is derived from conflicts in other countries. It also claims it does not have any exposure to large mega-yachts that are more vulnerable to sanctions.

In the aftermath of Russia’s invasion, the shares of listed Italian competitors like Sanlorenzo, The Italian Sea Group, plunged. They lost between 25 and 30 percent of their value but they have reduced losses during the past 10 days.

Ferretti had met analysts and investors in the last week and was slated to launch an institutional offering on Monday. It will then be expanded to retail investors, according to one source.

According to a source, it aims at raising $300 million through the sale of newly issued shares. The total value is $1.2 billion. Another source indicated a valuation of $900 million.

Sources indicated that shares would start trading around March 31st. The normal time frame for IPOs in Hong Kong is around 4 days, with five more days to trade.

Ferretti will likely use the money to grow its yacht fleet and develop other services, such as chartering and yacht brokerage.

Ferretti submitted the Hong Kong Stock Exchange application at December 31st, and CICC was the sole sponsor.

Hong Kong saw a 5% increase in trading on Thursday. That’s in addition to Wednesday’s 9.9% rise, which was driven by fresh Chinese economic stimulus.

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