MV Agusta in Yet Another Financial Crisis

Dennis Chung
by Dennis Chung

MV Agusta has a history of developing some of the most exotic performance motorcycles out there. Unfortunately, the company also has a history of financial instability, constantly struggling to carry a large amount of debt.

Despite reporting 100 million euros (US$111.8 million) of revenue in 2015 and a 30% sales growth over 2014, MV Agusta remains in financial trouble with a reported 40 million euros owed to suppliers and banks. Production out of Varese has slowed to a crawl while MV Agusta looks for a way to continue operating.

As a result, MV Agusta has filed for “concordato in continuità,” an insolvency proceeding under Italian law for the restructuring of debt to allow a company to continue operating. The company’s creditors (as well as its unionized employees) have 90 days to accept the proposal.

That MV was able to produce a 30% growth in sales last year while claiming a large number of backorders for 2016 means there is some hope of turning things around. To that end, MV Agusta says it has invested 15% of its annual revenue into research and development to expand beyond its core sportbike and naked streetfighter segments. MV is also making inroads with emerging markets, opening four showrooms in India earlier this year. But in order for these investments to pay off down the road, MV Agusta needs to be able to pay the bills today.

Giovanni Castiglioni Interview

The AMG logo is clearly visible next to the windscreen on Leon Camier’s F4 at last month’s WSBK round at Phillip Island. The logo was conspicuously absent at the following route in Thailand.

One possible solution is for Mercedes-AMG, which owns a 25% share in MV Agusta, to increase its stake in the company. Earlier this month, various reports out of Italy had the two sides negotiating terms, with Mercedes-AMG reportedly seeking a majority share. However Giovanni Castiglioni, MV Agusta’s president and 75% owner, is reluctant to give up control over the company.

Oddly, that stands in contrast to his late father, Claudio Castiglioni, who on more than one occasion, sold the company for millions only to buy it back for a nominal fee (the most recent buyer was Harley-Davidson which purchased MV Agusta for $108 million in 2008 only to sell it back two years later for a single euro). It’s a neat trick if you could pull it off, but it looks like Giovanni Castiglioni will have to go a different route.

Giovanni Castiglioni took over MV Agusta’s reins after the passing of his father, Claudio.

Castiglioni may instead turn to other investors, with private-equity firm Investindustrial being a potential partner. Investindustrial, of course, is the former owner of Ducati, and obviously is familiar with owning Italian motorcycle manufacturers. The question is how much of a stake Castiglioni is willing to give up to Investindustrial or any other potential investors.

Dennis Chung
Dennis Chung

Dennis has been a part of the team since 2008, and through his tenure, has developed a firm grasp of industry trends, and a solid sense of what's to come. A bloodhound when it comes to tracking information on new motorcycles, if there's a new model on the horizon, you'll probably hear about it from him first.

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  • Old MOron Old MOron on Mar 26, 2016

    So John Burns wrote a glowing review of the new Brutale. Made me interested in the bike. I wonder if I can use this news to bargain down the purchase price.

  • Starmag Starmag on Mar 29, 2016

    Maybe they just need a slammed bagger with a 21 inch front wheel to boost their NA sales. sarc/off

    Well, that and dealers. My buddy is selling his Norge which he loves just because it's had a few problems and it's a long way to the nearest dealer. On a trailer. Wasting one day each way in transit. Dampened his enthusiasm, it has.