MV Agusta hits financial hurdles

MV Agusta facing financial woes yet again as the company plans to restructure debts to take creditors in confidence. 

Iconic Italian motorcycle maker, MV Agusta, has hit the headlines again over its financial troubles. The 70 year old motorcycle manufacturer has announced that despite reporting a massive growth in its sales and turnover in 2015, its operations are being hurdled by increase in debts to creditors. As per a report the company is currently 40 million euros in debt.

In an official statement related to the matter, MV Agusta claimed that it has achieved a sales growth of 30 per cent in global markets despite a 12 per cent market growth. The manufacturer states that it has also witnessed 30 per cent growth in terms of annual revenue with a turnover of 100 million euros. Irrespective of that, the company is now finding itself in a troubled financial situation.

This, of course, suggests that the company is not making enough profit by selling bikes. On top of that, MV Agusta claims that it has invested more than 15 per cent of the annual turnover in R&D of their new products. As a result, the firm has now applied for an agreement of continuity (not to be confused with bankruptcy) so as to try and show that its business will run in the interests of its creditors. This is likely to make life difficult for MV Agusta since future loans will freeze and the company will have to continue paying the debt money from its current sales. Expect investments in future projects/new products to get a sizeable cut.

Apart from an illustrious history in the motorcycle industry, MV Agusta is also famous for its difficult financial situations in the past, resulting in change of the brand's ownership many times in the past. In 2014, Mercedes-AMG announced a long-term partnership with the Italian marque by acquiring 25% stake in MV Agusta. There are strong rumors that Mercedes-Benz might bail MV Agusta out of this situation, although it has not been confirmed by either parties.

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