Location: Glendale, California (formerly Phoenix, AZ)
Posts: 410
MV Agusta going under?
This is from a Malaysian newspaper on 1/17/06.
Quote:
"If this wasn't enough of a problem, several Agusta directors had broken ranks and were on the verge of having the firm file for early bankruptcy. It was really a matter of days," the banker said.
Quote:
He disclosed that Agusta's creditor banks were ready to foreclose and if that had happened, Italian law would have held Proton responsible for all contingent liabilities.
Location: Glendale, California (formerly Phoenix, AZ)
Posts: 410
Here's the full article:
Quote:
Banker: Proton lucky to sell MV Agusta
17 January, 2006 Kuala Lumpur: Countless number of people have been asking why Proton Holdings Bhd recently disposed of MV Agusta for just one euro (about RM4.50) but information emanating from people familiar with the deal point to the fact that Proton had to quickly let go of the "hot potato" in the Italian motorcycle-maker.
The facts were grim and simple: faced with a massive financial crunch, under-performing sales and rising production costs, Agusta was just days from missing an instalment to one of its creditor banks.
The instalment is believed to be well over 10 million euros.
"The consequence of missing an instalment payment to its banks for frozen debts would have automatically triggered a general default on its entire loan package.
This would certainly spell bankruptcy and at that point, even one euro would be out of the question," said a European banker involved in the disposal of MV Agusta.
He said Proton's sale of its 58 percent stake in Agusta to Gevi SpA for one euro was "no surprise" to international financial circles.
"Proton was lucky to dispose of Agusta for a token one euro to Gevi because the very banks that lent money to the motorcycle maker had deemed its shares to be worthless," said the banker, who is with a Swiss financial services group.
Agusta had requested for additional capital injection to keep it afloat when its creditor banks refused to extend any more credit.
"When the Proton management offered to pledge its entire Agusta shares to Agusta's banks, they were told the shares were worthless. It was a real turning point.
"If Proton stayed with Agusta, it would have to pump in even more funds on top of the 100 million euros it had already sunk into the company," the banker said.
He disclosed that Agusta's creditor banks were ready to foreclose and if that had happened, Italian law would have held Proton responsible for all contingent liabilities.
He said that although Proton Capital, a Proton Holdings' subsidiary, owned Agusta, Italian law allowed creditors and bankers to go all the way up to the beneficial owners - meaning Proton Holdings would be held liable.
"If this wasn't enough of a problem, several Agusta directors had broken ranks and were on the verge of having the firm file for early bankruptcy. It was really a matter of days," the banker said.
With bankruptcy filing imminent, Proton had to immediately conclude a sale to a buyer willing to take over the ailing Agusta, pump in cash, revive bank credit lines and take over all contingent liabilities, while relieving Proton from any further claims by Agusta's creditors.
"Gevi was the only credible financial investor willing to stick its neck out to fulfil all these conditions. Under Gevi's guarantee, the banks are happy enough to reinstate euro credit line," the banker said.
Agusta has chalked up debts in excess of 100 million euros and requires further working capital of 32 million euros. For the 15 months ended March 31, 2005, Agusta registered a net loss of 29 million euros.
Proton's share of net losses, representing 57.75 percent amounted to 16.75 million euros.
Proton has already given Agusta more money than the 70 million euros reported, providing 29 million euros as cash advance to bail out the troubled Italian company.
Agusta dragged Proton into the red for the first time in a decade. Proton reported a net loss of RM154.3 million for its fiscal second quarter ended Sept 30, 2005, hurt by bad debt charges related to Agusta.
In December 2005, the Proton board approved the sale of Agusta to Gevi for one euro, making the transaction its biggest loss on a single investment. Agusta cost Proton RM503 million, including its acquisition cost of RM367 million back in 2004.
The disposal of the Italian bike maker will not affect Proton's balance sheet as it had fully written off the investment. - Bernama
What is it about the Italian motorcycle companies that they cannot make money? They have beautiful bikes with character. How does H-D make record profits each quarter and MV/Bimota/MotoGuzzi/Benelli/Aprilia/Ducati seemingly one quarter away from closing their doors?
I certainly hope that MV finally finds their white knight that can turn the company around and keep their special place in motorcycling. Maybe Ferrari could buy MV. Or H-D. Or BMW.
However, if MV ever went into liquidation, Proton could probably buy the tooling for a song and make the bikes in Malaysia with Chinese-sourced components. Anyone fancy a new Proton F4-1000 for about $9k?
What is it about the Italian motorcycle companies that they cannot make money? They have beautiful bikes with character. How does H-D make record profits each quarter and MV/Bimota/MotoGuzzi/Benelli/Aprilia/Ducati seemingly one quarter away from closing their doors?
I certainly hope that MV finally finds their white knight that can turn the company around and keep their special place in motorcycling. Maybe Ferrari could buy MV. Or H-D. Or BMW.
However, if MV ever went into liquidation, Proton could probably buy the tooling for a song and make the bikes in Malaysia with Chinese-sourced components. Anyone fancy a new Proton F4-1000 for about $9k?
Exactly. IF MV ends up going under (hopefully not), and the assets are liquidated, another company could come in and buy the tooling and/or intellectual property of the company. An Indonesian, Malaysian, or Chinese factory could purchase these assets and continue to build the bikes in their country that would basically be identical in all but name. Perhaps this would be desirable for a compnay like Proton, or Zongshen in China.
While not from a bankruptcy, this has happened before. Kia purchased the Elan tooling from Lotus, and continued to make Kia Elans, albeit with their engine not Isuzu's.
Castiglioni and the Cagiva group will do what it takes to keep the MV brand going. Ducati has their financial problems, so did Aprilia. In the end these companies and adapt and keep turning out new products.
What is it about the Italian motorcycle companies that they cannot make money? They have beautiful bikes with character. How does H-D make record profits each quarter and MV/Bimota/MotoGuzzi/Benelli/Aprilia/Ducati seemingly one quarter away from closing their doors?
MV sells motorcycles...while HD sells a lifestyle. Isn't it amazing what a good marketing dept can do?
"Exercise restraint and discipline, only responding to posts from legit customers and those with constructive positive intent, you will find that the handgrenades explode harmlessly. You have many satisfied customers who are happy to have the parts you've made. My suggestion to you is keep making good parts, keep getting more customers, take care of them and let them speak for you."
In the new Motorcyclist, Cathcart says that MV actually made a profit in 2005 (I'm assuming EBITA but it was not stated specificaly). Also, Proton unloaded MV as a way of helping their own financial woes. Still, being saddled with as much debt (relatively speaking) for MV will be tough to overcome with only dirt bikes and exclusive sportbikes. But making money is still encouraging.
In the new Motorcyclist, Cathcart says that MV actually made a profit in 2005 (I'm assuming EBITA but it was not stated specificaly). Also, Proton unloaded MV as a way of helping their own financial woes. Still, being saddled with as much debt (relatively speaking) for MV will be tough to overcome with only dirt bikes and exclusive sportbikes. But making money is still encouraging.
I read the same article. I also assumed EBITA.
The market is small but they currently have no competition. A pedigree most manufactures would die for....
MRGRN, parts???? I have seen the quality of your work. You can make the parts!
Current MV's will only increase in value if the company folds. Everybody wants what they can't have...
on one hand i was hoping that proton hold on to MV so that one day it could learn and produce it own bike from here or at least assembled it here rather than from italy. at least it would be cheaper to us and maybe to the rest of the world and make the bike available to the masses at large.
on the other hand, proton should concentrate on their core business, producing and selling cars and with such amount of money, they could use it to focus on the R&D of their cars rather than trying to venture into a completely new business.
well, i guess they make their decision already and learn from it, and i believe those italian bank would be more happy to assist their fellow italian/european company rather than an unknown company from malaysia which a lot of people still dont know where it is located.
MV, i don't make parts for Italian bikes otherwisw i would have to charge more for them LOL.
love the MV style buy hate the price. maybe if they lowered the price more they would sell more units. touch to compete with such a limiting market IMO. you have to mass produce bikes to make money unless you have a low end bike to peddle and then rape people like the 999r platform for racing. MV should have made a cheapo thousand like $13-$15 that was more available and sold tons of them instead of trying to peddle $18k+ bikes that nobody was going to race and most can't afford, bad business sense IMO.
"Exercise restraint and discipline, only responding to posts from legit customers and those with constructive positive intent, you will find that the handgrenades explode harmlessly. You have many satisfied customers who are happy to have the parts you've made. My suggestion to you is keep making good parts, keep getting more customers, take care of them and let them speak for you."
MRGRN, Contrary to my screen name , I do not own an MV. It's a dream...the rc51 is reality. Just commiting on the quality of your work in general. Your 1000rr was nicely done, nicest one I have seen to date! I am a Honda man at heart plus it fits my budget. But I would like to have an MV one day.
I do not think that it would be in MV's best long term interests to produce a lower end line. I think it would ultimately hurt the brand. I think MV has a long, hard road ahead but it can survive with funding, good management and a focused vision. Keep overhead low and plan for long term growth in an exclusive market. Although given the current financial position, I am not sure it is possible without debt removal.
The bottom line is we all want one, but only a fortunate few can afford them.
Can't eat steak for every meal, gotta have some bread and butter too.
Ferrari's got Fiat as a goto, Aprillia's got Piaggio. Maybe Lambretta's left to snap up MV.
Quote:
Originally Posted by mrgrn
MV, i don't make parts for Italian bikes otherwisw i would have to charge more for them LOL.
love the MV style buy hate the price. maybe if they lowered the price more they would sell more units. touch to compete with such a limiting market IMO. you have to mass produce bikes to make money unless you have a low end bike to peddle and then rape people like the 999r platform for racing. MV should have made a cheapo thousand like $13-$15 that was more available and sold tons of them instead of trying to peddle $18k+ bikes that nobody was going to race and most can't afford, bad business sense IMO.
i was not saying "sell out" but maybe a little putting the ego down. MV is going to be prideful of backrupcy WTF? who cares if you can make $25,000 bikes if you have no sales base, no company to stand behind? making a slightly lessor model for $13k is not selling out, it is selling bikes. one has to sell things to prosper right? IMO ducati does not make money selling 999r's but lessor bikes and 999's and 749's and they make the 999r for their ego, pride. it is a shame that a bike like that can't be on the street more often. MV made very pretty 750's that never saw pavement and now more expensive 1000's that will never see the street, stupid IMO. IMO MV does not earn the respect they still get. yes, they WERE great but WTF, when was the last time you saw one competing on deserving scale? they are not in WSBK, AMA. you have to win on Sunday to sell on Monday right? they have been skating along on name recognition for too long IMO. they make a nice bike that nobody can afford then go bankrupt, ghey.
"Exercise restraint and discipline, only responding to posts from legit customers and those with constructive positive intent, you will find that the handgrenades explode harmlessly. You have many satisfied customers who are happy to have the parts you've made. My suggestion to you is keep making good parts, keep getting more customers, take care of them and let them speak for you."
i was not saying "sell out" but maybe a little putting the ego down. MV is going to be prideful of backrupcy WTF? who cares if you can make $25,000 bikes if you have no sales base, no company to stand behind? making a slightly lessor model for $13k is not selling out, it is selling bikes. one has to sell things to prosper right? IMO ducati does not make money selling 999r's but lessor bikes and 999's and 749's and they make the 999r for their ego, pride. it is a shame that a bike like that can't be on the street more often. MV made very pretty 750's that never saw pavement and now more expensive 1000's that will never see the street, stupid IMO. IMO MV does not earn the respect they still get. yes, they WERE great but WTF, when was the last time you saw one competing on deserving scale? they are not in WSBK, AMA. you have to win on Sunday to sell on Monday right? they have been skating along on name recognition for too long IMO. they make a nice bike that nobody can afford then go bankrupt, ghey.
Don't earn the respect??? WTF. Have you ridden one, have you ever ridden one at a track ??? They're gorgeous to ride hard.
I don't think the actual product is the problem.... supplier problems, plant capacity, the huge flooding of the factory a few years back, other crap that's been well documented has led to this situation....They're selling bikes to their manufacturing capacity yet they're still in trouble. Definately a long road back but I actually think their current product lineup will help.
....and they arn't that unobtainable. Ducati 999s costs more than F4 1000 here in Aus.
MV Agusta going under?
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