THE COURT in the Italian province of Varese has saved MV Agusta from bankruptcy by accepting that its measures to reduce costs and streamline its operations are enough to keep it running.
The Italian manufacturer hit choppy financial waters later year by being unable to pay its debtors, despite impressive growth and profit.
In March it asked for an agreement of continuity – protection against its creditors while it restructured its operations and debts in accordance with a plan set out by owner Giovanni Castiglioni.
The agreement of continuity led to MV’s debts being frozen while it restarted production. It has since received an injection of cash from the Anglo-Russian Black Ocean investment fund after buying back shares from Mercedes and being rumoured to be in line for investment from Polaris. It’s not known how much of a share Black Ocean has acquired in MV. But as positive as those measures were in the short term, the real future of the company depended on the court’s approval of Castiglioni’s plan.
With the court’s approval, MV Agusta can now proceed with a more focused and stable operation that will see it producing less bikes and slimming down its range before releasing up to three new models over the coming couple of years.
Speaking about the news, Giovanni Castiglioni said: ‘In the last 12 months the turnaround implemented has brought MV Agusta to generate positive cash flows needed to support the restructuring plan and the development of models and the consolidation of our primary markets. MV Agusta has a strong product range entirely new, created by five years of major investments, together with an iconic brand, are the key elements to support our growth and demand of our customers.’