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Unless Proton has been taken for the world's biggest RIDE, It looks like it's all over for MV. :cross: I just can't see how Castiglioni can get himself out of this one.

BTW, Great Site !

http://www.bernama.com.my/bernama/v3/news_business.php?id=175701

Banker: Proton Lucky To Sell 'Hot Potato' In MV Agusta

By Yong Soo Heong

KUALA LUMPUR, Jan 16 (Bernama) -- Countless number of people have been asking why Proton Holdings Bhd recently disposed of MV Agusta for just one euro (about RM4.50) but information emanating from people familiar with the deal point to the fact that Proton had to quickly let go of the "hot potato" in the Italian motorcycle-maker.

The facts were grim and simple: faced with a massive financial crunch, under-performing sales and rising production costs, Agusta was just days from missing an instalment to one of its creditor banks. The instalment is believed to be well over 10 million euros.

"The consequence of missing an instalment payment to its banks for frozen debts would have automatically triggered a general default on its entire loan package. This would certainly spell bankruptcy and at that point, even one euro would be out of the question," said a European banker involved in the disposal of MV Agusta.

He said Proton's sale of its 58 percent stake in Agusta to Gevi SpA for one euro was "no surprise" to international financial circles.

"Proton was lucky to dispose of Agusta for a token one euro to Gevi because the very banks that lent money to the motorcycle maker had deemed its shares to be worthless," said the banker, who is with a Swiss financial services group.

Agusta had requested for additional capital injection to keep it afloat when its creditor banks refused to extend any more credit.

"When the Proton management offered to pledge its entire Agusta shares to Agusta's banks, they were told the shares were worthless. It was a real turning point.

"If Proton stayed with Agusta, it would have to pump in even more funds on top of the 100 million euros it had already sunk into the company," the banker said.

He disclosed that Agusta's creditor banks were ready to foreclose and if that had happened, Italian law would have held Proton responsible for all contingent liabilities.

He said that although Proton Capital, a Proton Holdings' subsidiary, owned Agusta, Italian law allowed creditors and bankers to go all the way up to the beneficial owners - meaning Proton Holdings would be held liable.

"If this wasn't enough of a problem, several Agusta directors had broken ranks and were on the verge of having the firm file for early bankruptcy. It was really a matter of days," the banker said.

With bankruptcy filing imminent, Proton had to immediately conclude a sale to a buyer willing to take over the ailing Agusta, pump in cash, revive bank credit lines and take over all contingent liabilities, while relieving Proton from any further claims by Agusta's creditors.

"Gevi was the only credible financial investor willing to stick its neck out to fulfil all these conditions. Under Gevi's guarantee, the banks are happy enough to reinstate euro credit line," the banker said.

Agusta has chalked up debts in excess of 100 million euros and requires further working capital of 32 million euros. For the 15 months ended March 31, 2005, Agusta registered a net loss of 29 million euros.

Proton's share of net losses, representing 57.75 percent amounted to 16.75 million euros.

Proton has already given Agusta more money than the 70 million euros reported, providing 29 million euros as cash advance to bail out the troubled Italian company.

Agusta dragged Proton into the red for the first time in a decade. Proton reported a net loss of RM154.3 million for its fiscal second quarter ended Sept 30, 2005, hurt by bad debt charges related to Agusta.

In December 2005, the Proton board approved the sale of Agusta to Gevi for one euro, making the transaction its biggest loss on a single investment.

Agusta cost Proton RM503 million, including its acquisition cost of RM367 million back in 2004.

The disposal of the Italian bike maker will not affect Proton's balance sheet as it had fully written off the investment.
 

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Not sure if this is believable or not. In other words, I doubt very seriously if this is the end for MV Agusta. Why not? As anyone can see they have fianally gotten their act together. Maybe not financially but certainly with their product line. With the introduction of the 1000 line MV Agusta has literally positioned itself as the maker of the worlds fastest, best handling and most beautiful motorcycle in the world. Don't feel the same way? Just read all the articles out this past fall on the Tamburini. They are also offering many options on the 1000 platform for 2006, i.e. Mamba, Corse, Tamburini, Veltro, etc. This is not something that a company who is on the verge of going over the edge does. Trust me, someone will pick up MV and will allow it to continue to make great machines. Hell, if Bimota, Mondial, Ghezzi-Brian, etc. can make it, MV Agusta sure as hell can. Don't count this company out. They will be around for a while. A smart investor(s) will ensure it.
 

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MV has what is considered to be the most beautiful, and best (TM) moto in the world- hopefully they can find someone who is willing to stick by it..

That is the positive approach in looking at it..

Guess we'll have to wait and see what happens.
 

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That is one of the main things i am worried about too, it is hard enough to find parts for them now, if something great doesn't happen finding parts is going to be like trying to find a needle in a haystack, in terms of authentic MV parts. Anyone looking to buy an MV should buy it while they are still making them, heaven forbid, but the new ones might be the last models produced. I can always be hopefull.
 

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If anyone has taken Proton for a ride it was the staff within Proton. While MV may be in financial trouble, I find the article a little hard to swallow and as there is most definitely politics involved here and while this article may be based on truths it reads like spin.

The facts were grim and simple: faced with a massive financial crunch, under-performing sales and rising production costs, Agusta was just days from missing an instalment to one of its creditor banks. The instalment is believed to be well over 10 million euros.
I can't imagine any company flushed with funds or otherwise handing over EU$10,000,000 until they had to...and as I stated in the other thread, I would love to see Protons number crunching before they took over MV and maybe this would give us a clearer picture as to what they were expecting to achieve and how they planned on getting there. Increased production costs etc..whatever...and on it goes.

I refuse to believe that MV is the lame dog that some at Proton are attempting to make it out to be. No question that management at both companies have done a poor job of looking after MV but after reading this article I am more convinced at the politics surrounding this. I look forward to reading the next instalment.

BTW
Welcome Rouge Trader.
 

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From what I understand, Proton are in trouble in other areas of the business...I read somewhere that their domestic operations are facing increasing import competition and decreasing government support...so they probably ARE trying to consolidate losses...

Let's pass the hat round, people...EUR132M? Pah...no probs... :toothless
 

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well the beauty in this is that there will always be someone who will want to buy our bikes to make them garage queens or even living room furniture. i don't think we have much to worry about, and we'll all be in good shape either way.
 
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