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Chinese firm to have controlling stake in yacht manufacturer

By Wang Wen and Zhao Ruixue (China Daily)

10:53, January 11, 2012

BEIJING / JINAN - Shandong Heavy Industry Group Co Ltd, a State-owned machinery maker, signed a deal on Tuesday to purchase a 75 percent stake in Ferretti Group, one of the top builders of luxury yachts in the world.

Shandong Heavy Industry, which mainly makes construction and agricultural machinery, will pay 178 million euros ($227.8 million) for the controlling stake. In addition, Ferretti will receive 196 million euros in loans, the company said.

The stake will be directly owned by Weichai Holding Group Co Ltd, which is the largest wholly owned subsidiary of Shandong Heavy Industry.

The deal must still be approved by an Italian court and will be completed in three to six months, said Tan Xuguang, president of Shandong Heavy Industry and president of Weichai.

Ferretti is a debt-laden yacht maker based in Italy. It owns nine yacht brands, including Pershing, Riva and Ferretti Yachts. The deal will see the yacht maker's debts reduced from 685 million euros to 116 million euros.

"We will search for an opportunity to list this yacht manufacturer in the future," Tan said.

In the West, the market for yachts has become saturated, giving Chinese companies more opportunities to enter the industry through making purchases.

The global yacht market, meanwhile, has been in decline since 2008, when the world financial crisis led to consolidation in the industry. In contrast, the number of yachts imported by China increased by 129.64 percent from 2009 to 2010, according to a report released last month by the China Cruise and Yacht Industry Association.

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