Ferrari to give Fiat $2.81 billion before becoming independent

While the fact that Ferrari is “separating” from Fiat is a somewhat silly notion considering that it’s essentially being sold to the people who currently own it, the cash implication for Fiat isn’t very silly, as the Italian automaker is in desperate need of cash, according to Reuters, and the €2.25 billion ($2.81 billion) that Fiat will be receiving should certainly help.

“Marchionne needs all the cash he can get in order to finance his global expansion plans,” Erik Gordon, a business professor at the University of Michigan, said in an e-mail, as quoted by Bloomberg. He adds that the CEO “will take out all the cash he thinks he can extract, as well as desks, shelving, coffee machines and anything else he can convert” to liquidity.

Fiat CEO Sergio Marchionne announced last month that the Italian automaker will be spinning off Ferrari from the groups, sell a 10% stake via a public offering, and distribute the rest of the company’s stake in the luxury sports car brand to its shareholders. The spin-off is necessary for Fiat to cut debt and fund its ambitious business plans.