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MV Agusta Implements Project for Corporate Restructuring

The fact that MV Agusta is struggling with certain financial issues is old news, but things recently escalated to the point where the Varese manufacturer is now seeking a continuity agreement.
MV Agusta F3 800 Ago 1 photo
MV Agusta recorded a solid growth of 30% in 2015, with operations in certain markets growing by as much as 140 percent, but it appears that this growth was nowhere near enough to help House Schiranna pay their €40 million ($43.6 mil) debts.

We recently reported about AMG's solution to the problems of the company in which they already own a 25% minority. The German giant reportedly wanted to gain control of a yet unspecified majority in MV Agusta and most likely apply some measures to make the company profitable. In a way, do as Audi did when they paid a much bigger debt for Ducati after acquiring the Borgo Panigale maker.

However, such a perspective is far different from what the Castiglioni family, who own the business, has in mind. The Italian family is not exactly keen to lose control over MV Agusta, and is now seeking a continuity agreement to ensure that the company can keep on operating and stand a chance to pay the debts.

In a way, it's a "let us work and sell bikes to make money to pay you" agreement that sounds like a natural move. However, before such an agreement is reached, the creditors must be convinced that the move is also to their advantage and they will get paid.An Italian court will listen to the arguments brought forth by those involved and will ascertain whether the agreement is, in fact, good for everyone
Continuity agreements are often used when it comes to co-owned businesses, but in this case the details are a big unknown. We will most likely find out soon enough what MV Agusta's intentions are and whether they plan to buy out AMG (a rather unlikely option) or find another way to improve their situation.

We remind you that MV Agusta took a €15 million ($16.4 mil) loan from Banca Popolare di Milano, with the provisions that AMG retains a participation in the Italian motorcycle manufacturer no smaller than 20%. Should the shares AMG owns in MV Agusta drop below this margin, the load becomes due in its entirety immediately.

Below you have MV Agusta's press release attached in PDF format if you fancy a reading that avoids calling things by their proper name. Also, follow the link to get a better picture of what continuity agreements serve for.

 Download attachment: Restructuring Project (PDF)

 
 
 
 
 

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