Talks continue for assets of Indian

There’s no clear signal about the future of Indian Motorcycles as this issue of Powersports Business is being printed.
PSB editors tried repeatedly to reach Frank O’Connell, chairman of Indian, but without success. O’Connell did send us a copy of the letter he sent to dealers, dated Nov. 17, 2003. Here are the key points O’Connell made:

  • More than 90 bid solicitation packages were sent out to interested parties. Of this group, more than 40 signed a confidentiality agreement, and about 15 actually toured the Gilroy, Calif., facility. Several of the bids were for all the assets, while others were limited to intellectual property or hard assets only.
  • The company handling the bid process received about a dozen bids to purchase assets of Indian Motorcycle Corp. and affiliated entities. A decision was expected some time this month.
  • CMA, the independent third party who is representing creditors, is working to maximize the amount going to creditors. Stockholders are not likely to receive anything.
  • A key problem forcing the closing was the high cost of the infrastructure needed to provide the services of a true OEM, including R&D, and at relatively low production volumes.
  • The company had been looking for a strategic partner for several years. Unfortunately, it burned through its cash this year funding new 2004 production and finishing 2003 orders.
  • In September, negotiations with a potential investor broke down and Indian couldn’t meet its financial obligations. Audax, a major investor, decided not to invest further at that time.
  • The total investment since 1998 in Indian exceeds $200 million.
  • There are no 2003 models or 2004 models available to dealers.
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