Cash Problems for MV Agusta Could Open the Doors to Mercedes
The Italian company is encountering financial woes, despite a 30 percent growth rate and an increase in sales over the past few years from €30 million to €100 million.
Even with this sales growth and a recent influx of capital from Mercedes-AMG, the company's budget shows an increase in debt to suppliers, banks, tax authorities and pension funds. They are filing for what be chapter 11 bankruptcy in the USA called "Request continuity" here refers to Italy's concordato preventivo (arrangement with creditors), Italy's equivalent to Chapter 11 of the US Bankruptcy Code, under which the debtors can agree to a plan put forth by the company. The company's restructuring plan is slated to be presented on April 8.
While not famed for their 'adventure' or even touring class they have entries in the sport touring like the Turismo Veloce 800. The last bail out came from a surprising source in the form of Harley Davidson but it would seem the business structure has again failed where the style succeeds.
So, if you don't really follow the races here is a little background on the Italian style giant: MV Agusta, originally Meccanica Verghera Agusta, is a motorcycle manufacturer founded on 12 February 1945 near Milan in Cascina Costa, Italy. The company began as an offshoot of the Agusta aviation company formed by Count Giovanni Agusta in 1923.
We do hope this is not the end of another icon in the field of motorcycle production. The press release at least is sounding optimistic!
MV AGUSTA IMPLEMENTS PROJECT FOR CORPORATE RESTRUCTURING
Varese, 22 March 2016 - The MV Agusta brand, and the family heritage which has reestablished its presence internationally, is based on the values of passion, motivation, perfection and ambition. These values have led the company to close 2015 with a turnover of 100 million euro together with an increase of 30% over the previous year.
Our bikes have become the undisputed icons demonstrated with a 30% sales growth rate compared to a 12% market growth. To create improved visibility, content and the greatest potential possible in emerging markets, we have invested more than 15% of the annual turnover in Research & Development, to enter new segments and ensure undisputed excellence in terms of quality and performance standards that fans expect from this brand.
Without this continual innovation, investment and entrepreneurial passion, the Made in Italy, of which MV Agusta represents the "upper-premium" segment in the two-wheeler market, would not exist.
In recent months it has been reported through the press the news regarding the necessary financial needs in MV Agusta to sustain this organic growth.
MV Agusta has decided to hold its ground together with the employees and its creditors by means a composition with creditors proceeding to request continuity that will allow the company to be able to restructure and generate positive growth returns for its stakeholders.
MV Agusta is a company with tremendous potential, as demonstrated by the trend of the last five years, with a growth from 30 to 100 millions of turnover, in the unique unmistakable nature of its products and especially in its reinforced Italian identity. We are currently a company that is continually growing, boasting a strong order book for 2016 and a backorder generated by new models which marks an increase of 42% over the previous year, as well as improved sales of +36% for March 2015.
With the active involvement of all its employees and a reinforced management structure, MV Agusta has already identified the strategy aimed at consolidating and strengthening corporate values, as well as the protection of the company's stakeholders.
We are confident that - overcoming the current situation of financial liquidity - our company will recover and achieve economic results that satisfy the expectations of our employees and our creditors.