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Shelby goes public: Stock in new company soars in early trading

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AutoWeek
By BOB GRITZINGER

Carroll Shelby has taken his sports car business public in part to help insure the future of the Shelby brand.
Amid takeover rumors and parent-company bankruptcy proceedings, Carroll Shelby has pulled a fast one on everybody interested in what happens to his Las Vegas-based sports car business. Shelby has gone public.

As of June 3, Shelby entities—formerly known as Shelby Automobiles Inc. and Carroll Shelby Licensing Inc.—were acquired by a defunct public start-up company called Ginseng Forest Inc., which promptly renamed itself Carroll Shelby International Inc.

John Luft, president of the newly formed Shelby corporation, said Ginseng merely served as the entity to provide an easy way for Shelby to go public, a process he likened to minting a new Cobra starting with just the shell from one of the original Cobras from the 1960s.

“It’s like taking a wrecked Cobra, saving the VIN (vehicle identification number) and building a new body,” says Luft. “We’ve re-bodied the shell.”

Stock in the new company, owned 70 percent by Shelby and 30 percent by Ginseng’s owners, Harold and Sam Sciotto, started at $1.40 per share the first day of trading (still listed under Ginseng’s old code as GSGF on OTC) and rose to $4.25 per share within a day, with some 11,000 shares sold, Luft says.

Luft said the intent of the stock offering is to raise capital for the new company, but also to “ensure the future of the brand” and to protect deposits placed on cars ordered in recent months. Luft said the company has already resumed production of new 289 and 427 Cobras at a newly leased facility in Las Vegas and intends to build some 150 of the cars this year. In addition, the company also plans to build about 30 “continuation” Cobra models as well as embarking on several other specialty car projects.

Just how Shelby managed to escape the creditors bearing down on its parent company, Michigan-based Venture Industries, is another story. Luft says Shelby’s deal with Venture was limited to production of Series 1 replicas, but that Shelby only licensed Venture to use the Shelby name. That deal was revoked some six months ago when Venture got into financial trouble, Luft says.

As a result, Shelby as a company is free to move ahead with production of new and vintage cars using the Shelby licensed names including: Shelby, GT350, GT500 and Cobra Daytona, Luft says.

Luft says Venture’s part of Shelby is the portion that Factory Five Racing, a Massachusetts-based replica car maker, is trying to purchase. Luft says Venture’s portion has little or no value and its only assets are some leftover Series 1 parts. But a buyer as well as Venture would probably take issue with that position, most likely in court.

“If we were buying the company, we would be buying the whole company,” said David Smith of Factory Five.

We’ll say this week what we said last week: Stay tuned.
 
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