MV Agusta Gets Financial Help From New Investor
Sameer Contractor
1 min read
Nov 22, 2016, 08:34 PM
Key Highlights
- Investment firm Black Ocean has signed an agreement with MV Agusta
- MV Agusta has been facing financial debts of up to 50 million Euros
- The partnership between MV Agusta and Mercedes-AMG is uncertain
MV Agusta might have just been induced with new life, having finally found an answer to its monetary woes. We say that because the Italian bike maker recently signed an agreement with Black Ocean Investment Group to recapitalise the company. The move will finally help the famed bike maker to restrategize its operations, as it can now pay debts and revitalise its relationship with suppliers, workers and most of all, continue development of motorcycles.
Headed by Oliver Ripley and Timur Saradov, the Black Ocean Investment Group is the investing arm of Ocean Group and has diversified investments with the largest being in the private jet charting company - Ocean Sky.
Speaking on the new capital investment, MV Agusta CEO, Giovanni Castiglioni said, “I am very pleased that we have reached this agreement with Black Ocean. Beyond the strengthening of our capital, which is important for the future growth of MV Agusta, I strongly believe that Mr Sardarov, Mr Ripley, and their global team will be able to contribute with their entrepreneurial and managerial skills in the consolidation of MV Agusta as a key player in the super premium motorcycle market.”
One of the most famed bike makers from Italy, MV Agusta is one of the most sought after motorcycle brands globally with a strong lineage in motorsport. MV Agusta was founded in 1945 as an aviation company by the Agusta family and moved to the motorcycle business to fund their racing effort. Over the years, the brand did face lots of troubles and was revived only 20 years ago by its current CEO Giovanni Castiglioni. Currently, the brand is the producer of some of the finest motorcycles in the world, and also competes in the World Superbike Championship.
MV Agusta has been facing a liquidity crisis in recent times with respect to finances. This has restrained the company from going forward, despite having posted a turnover of 100 million Euros and a 30 per cent increase in sales in 2015. The company owes a debt close to 50 million Euros at present (around Rs. 362 crore) and has been looking for new investors over the year. It’s also known that the struggles have lived for so long due to Castiglioni not wanting to relinquish control of the brand his father Claudio helped build.
The past year of financial turmoil has prompted concerns about the future of MV Agusta. It almost felt certain that the Italian bike maker would have to shut shop after Italy’s Guardia di Finanza found that the company had been using the social security funds of its workers to pay the money owed to parts suppliers, an allegation which MV Agusta disputes; while the company's CEO Giovanni Castiglioni was investigated for irregularities on his tax return earlier this year. As part of its strategy to dilute expenses, MV Agusta did let go of a good amount of workforce, while production was limited to around 5700 units per year, from 9000 units. However, the move has helped the Italian company little to curb its losses.
Meanwhile, MV Agusta's Indian operations only commenced in the country this year with the company selling the very popular Brutale series going up to the flagship F4. With troubles back home, it will need to be seen if the company's domestic operations are affected by the same.
With Black Ocean's arrival, it is still unclear what will be Mercedes-AMG's stand on its investment in MV Agusta. The German automaker has less than 25 per cent stake in the motorcycle brand and it is unclear if the automaker will continue in its existing role or will choose to depart. Either of the companies are yet to divulge details on the agreement, but we can expect certain major announcements shortly. Could this be the major push that MV Agusta is looking for? We will find out soon.
Headed by Oliver Ripley and Timur Saradov, the Black Ocean Investment Group is the investing arm of Ocean Group and has diversified investments with the largest being in the private jet charting company - Ocean Sky.
MV Agusta F3 800 RC
One of the most famed bike makers from Italy, MV Agusta is one of the most sought after motorcycle brands globally with a strong lineage in motorsport. MV Agusta was founded in 1945 as an aviation company by the Agusta family and moved to the motorcycle business to fund their racing effort. Over the years, the brand did face lots of troubles and was revived only 20 years ago by its current CEO Giovanni Castiglioni. Currently, the brand is the producer of some of the finest motorcycles in the world, and also competes in the World Superbike Championship.
MV Agusta WSBK
The past year of financial turmoil has prompted concerns about the future of MV Agusta. It almost felt certain that the Italian bike maker would have to shut shop after Italy’s Guardia di Finanza found that the company had been using the social security funds of its workers to pay the money owed to parts suppliers, an allegation which MV Agusta disputes; while the company's CEO Giovanni Castiglioni was investigated for irregularities on his tax return earlier this year. As part of its strategy to dilute expenses, MV Agusta did let go of a good amount of workforce, while production was limited to around 5700 units per year, from 9000 units. However, the move has helped the Italian company little to curb its losses.
2017 MV Agusta Brutale 800 RR
With Black Ocean's arrival, it is still unclear what will be Mercedes-AMG's stand on its investment in MV Agusta. The German automaker has less than 25 per cent stake in the motorcycle brand and it is unclear if the automaker will continue in its existing role or will choose to depart. Either of the companies are yet to divulge details on the agreement, but we can expect certain major announcements shortly. Could this be the major push that MV Agusta is looking for? We will find out soon.
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