In this model, Fiat is the parent company of Ferrari and it's looking to realize value from Ferrari. Already done in this model is the first step where Fiat was looking to IPO a minority stake in Ferrari. In this model, we're looking at the secondly. Secondly, Ferrari will take out debt and pay a dividend to Fiat. So Ferrari is the subsidiary. Ferrari's gonna take on this new debt. It's then gonna pay out an extraordinary dividend up to its parent to fiat. This enables fiat to extract some cash from its subsidiary without fully divesting a Ferrari. It's worth noting that it would be unusual to do this kind of debt pushed down and dividend pay up after an IPO has taken place. So this is slightly unusual. So here we have step one. This is where the IPO has happened and we found Fiat's post IPO balance sheet. What we need to do in step two is restate Ferrari's balance sheet. We've got Ferrari's balance sheet. Initially here, we're going to find it after some adjustment. So we'll start by doing column H. I'm going to take Ferrari's initial figures and then add on the currently empty adjustment column. I'm gonna copy that down, but for all the subtotals, I'll copy those subtotals across in just a second. And now those subtotals I'll copy across from column F for consistency.

Now let's look for those adjustments. If we go up to the step two details, the restructuring of Ferrari capital structure, we can see that Ferrari are gonna take out a term loan, a bridge facility, and an RCF a revolving credit facility. So that's 2,119 of new debts. We're gonna put that all into the long-term debt for now. They're then going to pay a dividend to fiat. How is this debt going to be accounted for? Well, in our adjustments column, we're going to have cash go up and debts go up. So just dealing with the debt for now, cash increase of 2,119 and long-term debt the same. We're gonna put it all into long-term debt for now.

The second adjustment was the dividend to fiat. Now it's worth pausing for a moment to think what's gonna be happening in each of the different companies. As Ferrari is a subsidiary, we are going to see the dividend leaving. We'll see a cash out, an equity out. If we could see the parents' standalone balance sheet, then we would see the dividend being received. But if we're looking at the group accounts, then we wouldn't see any change because of this dividend. Cash would simply be moving from inside the group to another part of the group. Because we're looking at Ferrari, we are going to see the change. We are going to see the difference in the subsidiary. So the first thing was that the cash is going to go down. You might notice that The dividend is larger than the debt taken out. So the net impact to those adjustments is negative 814. Now we need to look at the dividend impact on the equity line item. If we scroll down to equity, we should be seeing the dividend coming out here. So I'm gonna press equals minus. Go off and find that dividends.

2,933. And that's come out. So for the dividend, we've got cash down and equity down. So our balance sheet formula balances, and if we check down at the bottom, we've got a balance check of zero.