A court in Italy has ruled that temporary receivership proceedings against MV Agusta Motor SpA, initiated in November 2002, are to be terminated considering that the company has shown it is able to meet its financial commitments.
Malaysia’s Proton Holdings Bhd. signed a letter of intent last year to study the feasibility of buying 50% of the Italian motorcycle company, which produces 18,000 MV Agusta, Cagiva and Husqvarna a year. On Oct. 29, MV Agusta CEO Claudio Castiglioni struck a deal with the Proton to have the Malaysian firm underwrite a Euro 70 million loan from CitiBank. The deal allows MV Agusta to meet all of its outstanding debts with banks and suppliers, and therefore a full return to capital and asset liquidity, before a Dec. 31 deadline.
Upon completion of the Euro 70 million capital increase, Proton will become MV Agusta's majority shareholder. Castiglioni will remain as company CEO, with special responsibilities in the areas of marketing and research and development, but Proton will appoint a managing director.
"The return to better fortunes of MV Agusta is due to a series of factors that have concretely come together to bring about this extraordinary result," Castiglioni said in a prepared statement. "I therefore wish to express particular thanks to the banking system in general, and to Banca Intesa in particular, for all their help and advice. It is thanks to them that the company is still a going concern. Nor let us not forget Proton, who have believed in the value and potentials of our brands, and with whom we will construct a leading force to be reckoned with on an international level."
Proton is assisted in the deal by financial consultant Société Générale and by law firm White & Case. The Castiglioni family financial advisers are Lazard, and their legal counsel is NCTM.
In 2003, Proton reported Euro 114.5 million in profits on income of Euro 1.5 billion. Listed on the Kuala Lumpur stock exchange, it is one of Asia's leading car manufacturers. Owner of Lotus for the past eight years, the Group is pursuing an international market expansion strategy involving industrial partnerships with companies in the automobile and motorcycle industries. In October, Proton and Volkswagen AG agreed on a partnership to assemble the German carmaker's vehicles in Malaysia for sale in Southeast Asia.
Copyright 2004 Powersports Business