MV AGUSTA IN CRI­SIS

CEO and owner, Gio­vanni Castiglioni re­veals stream­lined new di­rec­tion for trou­bled firm

Motorcycle News (UK) - - This Week - By Andy Downes

MV Agusta will have to get smaller in or­der to sur­vive over the long term, and that process has al­ready started ac­cord­ing to boss Gio­vanni Castiglioni. The Ital­ian mar­que is to un­dergo a com­plete re­struc­tur­ing as it seeks the fi­nan­cial back­ing it needs to stave off liq­ui­da­tion.

Ru­mours that pro­duc­tion had ceased at the fac­tory first be­gan to sur­face in Fe­bru­ary, with lo­cal sources and in­sid­ers sug­gest­ing that much of the work­force had been sent home as man­age­ment sought in­creased in­vest­ment from its cur­rent part­ners, or to find new in­vest­ment else­where. The fac­tory phones went unan­swered, and no staff would go on the record to con­firm what was hap­pen­ing.

But fol­low­ing the firm’s first pub­lic ad­mis­sion this week that all was not com­pletely well at MV, Castiglioni spoke ex­clu­sively to MCN about the situation, ex­plain­ing that the com­pany are in­volved in a ‘con­ti­nu­ity agree­ment’ with cred­i­tors, and that a com­plete re­struc­tur­ing of the op­er­a­tion would re­duce costs and, com­bined with money from new in­vestors, would en­able the com­pany to weather the storm.

In essence, the com­pany has run out of cash and the debt it cur­rently car­ries is be­ing moved and rene­go­ti­ated. In the short term MV have been granted a ‘pay­ment holiday’, while the man­age­ment seeks fresh in­vestors and new re­pay­ment terms. A dead­line of the end of 2016 has been set for ev­ery­thing to be re­solved, but MV boss Castiglioni ex­pects a res­o­lu­tion to come sooner.

Castiglioni told MCN: “We had a plan to in­crease pro­duc­tion vol­umes at MV Agusta to be­tween 15,000 and 20,000 units a year, and now we have de­cided that’s not achiev­able.

“We are go­ing to con­cen­trate on our core busi­ness, which is to build premium bikes such as our F4 su­per­bikes, and fast tour­ers in­clud­ing the Turismo Ve­loce 800 – but all of this will be with smaller vol­umes.

“Our cur­rent liq­uid­ity prob­lems have come from our spend­ing on re­search and devel­op­ment on new mod­els over the past few years. We have ex­panded the model range a lot. Our re­search has now shown cus­tomers want a dif­fer­ent type of MV and that is at the high end of mo­tor­cy­cles, which we will be fo­cus­ing on for the fu­ture.

“We will be re­struc­tur­ing the debt and seek­ing new in­vestors. Noth­ing has been signed at the mo­ment for new in­vest­ment, but the com­pany will be car­ry­ing on while the search con­tin­ues.”

The ru­mours sur­round­ing MV over re­cent weeks sug­gested pro­duc­tion lines had com­pletely stopped and staff had been laid off but Castiglioni poured cold wa­ter on these re­ports, ex­plain­ing that: “Pro­duc­tion has not stopped, but pro­duc­tion lines have been slowed down for some months now and we have lost a lot of pro­duc­tion be­cause of this. We have been con­cen­trat­ing on sell­ing off the in­ven­tory of bikes to raise money.”

Ger­man car com­pany AMG - a divi­sion of Mercedes-benz and par­ent com­pany Daim­ler - is a 25% share­holder in MV Agusta, and there have been un­sub­stan­ti­ated ru­mours that AMG were will­ing to ei­ther sell off their shares or take a larger stake in MV, on the con­di­tion that Castiglioni stepped aside.

“These are not com­pletely true,” says Castiglioni. “I can­not speak for Mercedes or AMG but as far as I know there was no in­ter­est in them be­ing a mo­tor­cy­cle pro­ducer. Los­ing them as a mi­nor­ity share­holder is not a prob­lem to me. I want to carry on run­ning MV and I’m not in­ter­ested in sell­ing the com­pany.”

‘We are go­ing to con­cen­trate on build­ing premium bikes but with smaller vol­umes’

While Castiglioni won’t be drawn on de­tails over how many bikes the com­pany will aim to sell each year he says it will be fewer than in 2015, which he con­firmed to­talled 8500 units.

So which mod­els are likely to suf­fer in this fo­cused re­struc­ture? With Castiglioni sug­gest­ing that the high­end mod­els would form the bedrock of the busi­ness go­ing for­ward, the im­pli­ca­tion is that the cur­rent 20bike range will be re­duced to a more stream­lined se­lec­tion, with the F3 675 su­pers­port ma­chine, Bru­tale 675 naked, and the base mod­els in the rest of the 800 and F4 range likely to be phased out in line with stock run­ning out. Time will tell if a deal can be reached that of­fers the firm more se­cu­rity, but it seems the MV roller­coaster ride isn’t over yet.

MV boss Castiglioni de­nies ru­mours that the fac­tory has stopped pro­duc­tion

The com­pany will con­tinue to pro­duce premium ma­chines like the Turismo Ve­loce but in smaller vol­umes Gio­vanni Castiglioni with late fa­ther Claudio

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