An official release from MV Agusta says they are implementing a “corporate restructuring” which has rumour mongers wondering whether the booming company is actually going bust.
The rumour is sparked by the fact that they owe €40 million (about A$60m) to creditors and AMG is moving in to buy more of the company.
However, bankruptcy seems to be well wide of the mark.
In fact, the company seems to be a victim of its own success. Sales growth is booming 30% and the company is planning to spend more on research and development which means even more new models will be coming.
The restructure seems to be a bean-counter’s way of ensuring the company’s incredible growth does not cause cash-flow issues as they pay off debts.
However, the problem for MV Agusta is that it has a €15 million (A$22m) loan with an Italian bank that stipulates AMG must have a 20% share of the company. If the share price drops below this, they have to pay off the loan straight away.
It would seem strange to call in a loan from a booming company, sending it broke, because they may not be able to pay it back at that stage. But stranger things have happened in the world of high finance.
Joseph Elasmar of Australian MV Agusta importersUrban Moto Imports says the partnership with AMG has led to an improvement in build quality, technology, marketing strategies, paintwork, spare parts inventory, online communication and warranties.
AMG investment is also yielding six new MV models in 2016 including a limited-edition MV Agusta F3 800 with Mercedes Solar Beam paint to be released in September.
Here is the full text of the MV Agusta announcement:
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.