MV Agusta Comes Back with Proton
December 20, 2004
Filed under Features
Things are looking up for MV Agusta Motor SpA now that Malaysian car maker Proton has opened its checkbook. A court in Italy has ruled that temporary receivership proceedings against MV Agusta Motor, initiated in November 2002, should be dropped now that it has new financing.
On Oct. 29, MV Agusta CEO Claudio Castiglioni struck a deal with Malaysia’s Proton Holdings Bhd. to have the Malaysian firm underwrite a Euro 70 million ($91.3 million) loan from CitiBank. The deal allows MV Agusta to meet all of its outstanding debts with banks and suppliers, and meet capital and asset liquidity requirements before a Dec. 31 deadline.
Upon completion of the loan, 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.
Proton 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.
Established in 1983, Proton reported Euro 114.5 million ($152.2 million) in profits on income of Euro 1.5 billion ($1.99 billion) in 2003. The Malaysian government owns 45% of the company, which is listed on the Kuala Lumpur stock exchange.
In March, Japan’s Mitsubishi Motors Corp. ended a 21-year alliance with Proton when it sold its 7.9% share in the company.
In November, the government of Singapore purchased a 5% share in the company for an estimated $65 million.
Owner of the Lotus brand for the past eight years, the Group continues to pursue an international market expansion strategy involving industrial partnerships with companies in the automobile and motorcycle industries.