The financial saga of MV Agusta seems to have taken a new twist, with a report emerging of the beleaguered Italian motorcycle manufacturer’s CEO Giovanni Castiglioni saying he is “negotiating a buy-back of shares,” from 25% shareholder Mercedes-AMG. As reported by Italian daily Il Giornio, this might be easier said than done, as MV is currently struggling under a debt burden of over 40 million euro (RM178 million).
To complicate matters further, a 15 million euro (RM66.75 million) loan facility from Banco Popolare di Milano was reportedly secured on the strength of MV Agusta’s part acquisition by Mercedes-AMG, and the debt immediately falls due should Mercedes-AMG’s stake in MV Agusta fall below 20%.
Thus, for MV to sever ties with Mercedes-AMG and forge its own path, it will need to find funding, or investors willing to underwrite the debt, as well as buy-out Mercedes-AMG’s stake. According to reports, Mercedes-AMG bought its 25% stake in MV for 30 million euro (RM133.5 million) back in November 2014.
This will be in addition to whatever funding that might be necessary to continue MV Agusta’s operations and expansion plans, which saw it release several new models for 2016. Its factory in Schiranna, Varese, is currently shut-down, and approximately 200 workers are expected to be laid-off.
In addition to a temporary shuttering of its production operations, MV’s research budget is also being slashed in half, from 15 million euro currently to 7 million euro (RM31.1 million). Its racing division will take a major hit, going from 4 million euro (RM17.8 million) to only 600,000 euro (RM2.67 million).
The crux of the financial strife in MV Agusta lies in the fact that Castiglioni refuses to give up control of the firm or sell its shares, something that Mercedes-AMG insisted upon if it was expected to pump in funds to help MV stay afloat and continue production. Although MV Agusta’s financial restructuring plan – in an effort to stave off bankruptcy – has been approved by Italian courts, a suitable ‘white knight’, in the form of an investor with funds to spare, has yet to emerge.
Should MV Agusta fail to secure adequate financing to carry on operations into 2016 and beyond, it would be a shame, as its current 800 cc triple engine has earned praise from both the public and motoring press, and deserving of further development. However, a good engine design alone is not enough, and proper financial and corporate management needs to be in place for any manufacturer to succeed.
In his interview, Castiglioni said that “we are interested in the quality of sales, immediately cash out the money to have liquidity. We want to go back to being the Ferrari of motorcycles.”
Mesidis with all its global might oso cannot save MV. What say u now P1 bashers?
1-rinngiitt.
MV mintak donation, means dah sampai tahap -1 rinngittt. Lagi teruk
Mercedes clever. Only invest 25%, limit their exposure. Proton more clever, buy 100% every year dump money into bottomless pit.
Mercedes clever. Bought AMG – luxury lifestyle brand. Then buy MV, same concept. Proton cleverer. Family car manufacturer. Fiercely patriotic – everything want to be done in house by Malaysians. Then wake up one morning go buy Italian superbike manufacturer.
Even more clevererer. Can technology transfer. Can use fairing, radial brakes and master cylinder, chain drive, aluminum beam frame, cassette type gearbox, engine that revs to 14,000 rpm in next Proton model. No need roof also lah. Can wear helmet.
Lu mabuk ketum ka?
…and people seem to be conveniently forgotten that when P1 sold MV Agusta, people are bashing it with “1 ringgit” jokes.
If only those same crowd do realise today that not even Merc can help ’em.