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the one who was at fault will have to pay for it. I will admit that I made an apparent mistake in ever believing such a marriage could take place with the people I was dealing with, but with one important consideration. I have all along behaved in a completely honest, positive way, and my business dealings were conducted from first to last in a serious, correct manner. It seems that was my mistake. You mentioned the courts. So you're going to sue Piaggio? We've already begun litigation against them the court proceedings commenced on August 28, 2002. We've presented a claim for Euro 120 million in damages against Piaggio (about £80 million/$125 million - AC) which is currently pending a hearing, and when that takes place, it'll be up to the judge to decide who was right and who was wrong. The damage done to our company was both brutal and considerable: we had a range of new models ready to enter production which had been launched to rapturous acclaim from both press and public and for which we had many orders which remain unfulfilled. What the other side did to us was very untimely and extremely damaging. We intend to gain full compensation for that, given that we had a signed contract as the basis for our merger. But, from your point of view, what prevented Piaggio completing the deal? Alan, because of the pending court case, I don't want to go into any more details about matters which are sub judice. But I will repeat again - I conducted myself in a completely open and honest way but evidently trusting too much in the good faith of the other parties. I've died a death watching MV Agusta languish and falter as a consequence of that the company which not only I but others, too, consider to have the most innovative ideas and most exciting products of any Italian manufacturer, bearing historic names which nobody else can rival. But now, we have the worst behind us and are on the way back. On what basis is the company now structured - and, to go back to my original question, what confidence can a customer have in MV Agusta's continued existence? We presented a business plan to Banca Intesa, which is the bank which held the majority of the debt of both Piaggio and ourselves, and they have not only approved it but also supported it by underwriting the capital needed for our return to profitability. We have restructured the operation of the company under our new CEO, Paolo Donghi, who has already proven his worth in this type of situation (Donghi previously ran Moto Guzzi for De Tomaso during the 1980s, then worked for Cagiva in the Czech Republic, managing its ultimately abortive investment in CZ - AC). Furthermore, MV Agusta Motorcycles SpA has been restructured financially under the supervision and with the support of Banca Intesa, which has also brought in extremely significant outside investors of good standing in the Italian business community, whom they have recommended to become involved in relaunching the company. I am sincerely happy with this situation, not only for the obvious reason that it has permitted us to restart manufacture, but also because it brings to the company a level of expertise in the management of its affairs which I will admit it never had before. If it's true that both MV Agusta and Piaggio owed signficant debt to the same bank, Banca Intesa, why do you think it is that they have so far only decided to help bail you out, and not Piaggio? It's because MV Agusta has a line of products which people want to buy, and for which, after almost two years of sporadic production caused by this situation, we still have thousands of firm orders. The bank has examined our affairs and concluded, rightly, that we can trade our way out of the difficulties we have been placed in, whereas for a company like Piaggio, which is essentially a scooter specialist, it will be much more difficult. The scooter market is in continuous decline because of saturation and will go still lower, and they have no motorcycle products which they can depend on to redress this. That's why they needed us. Look, Alan, the worldwide bike market isn't exactly booming, but at least it's f1atlining and not in free fall, as scooters are. We manufacture a luxury product - even Husqvarna is just that, because nobody needs to buy a dirtbike to go to work on, in the same way they buy a scooter as a utilitarian means of transport. MV Agusta is the Ferrari of two wheels, Cagiva just one step lower - and the market for these products continues to remain firm, especially when they're as unique and desirable as ours. That's why our company has a strong potential and that's what Banca Intesa has recognized. Is the bank now a shareholder in MV Agusta as part of the recovery program? No, the company is again 100-percent owned by me and my family (therefore, by inference, no longer with Piaggio holding a 20-percent shareholding as part of the now scrapped merger plans AC). The bank has invested Euro 25 million in cash (about £16 million/$26 million - AC) for a minimum 4 to 5 year period, which will guarantee our return to profitability. For this reason, our future customers may have every faith in our ability to support them with after-sales service and spare parts backup. But if MV Agusta is presently in a state of "amministrazione controllata," who's really running the company - you, or the bankruptcy courts? I am - together with Paolo Donghi and my son Giovanni, who has just returned home after spending four years in London majoring in Business Economics at the European Business School, during which time he gained hands-on experience in merchant banking. He's a very big bonus to have around, because he's much cooler and less impulsive than me, which obViously comes from all the time he's spent in England lately! I'm too much in love with motorcycles, Alan - if I had 600 million euros, I'd spend them in no time on something fantastic and exciting to do with two wheels, but Giovanni's much steadier, less impulsive, and having him working alongside me will be a great asset for our business. The system of "amministrazione controllata" allows for existing debts to be frozen for a period of up to two years, which in our case entails between 70 and 80 million euros (£45-50 million/$77-83 million - AC), which we anticipate being able to earn quite comfortably through sales of our products. The bank agrees, which is why they are underwriting our operation. But to monitor this, we have three courtappointed officials who for the next three years will keep an eye on the way we are running things by visiting us every fifteen days or so to check everything is in order. However, they have no administrative function, only a supervisory one - their job is just to make sure we are observing the terms of our agreement with the court. Then, at the end of the five-year period when all the debts as paid off and the company is operating normally again - arrividercil In the meantime, we are still running the company as before. I have to stress that our business plan is a very conservative one, erring if anything on the side of caution. For example, in it we have projected the manufacture of 1700 Brutales this calendar year but we could sell double that number in Italy alone, without taking into account export sales. But we preferred to rebuild our operation on a firm basis, without gearing up too fast. However, the potential is there for serious growth. Is it true that, in the wake of the collapse of the Piaggio deal, you received offers from other motorcycle companies to purchase either the entire MV Agusta group or Husqvarna alone? It's rumored especially that Ducati made you an offer for Husqvarna, to give them the dirtbike brand they badly lack? That's not true - they didn't. And neither did TPG, if that was your next question! How many assembly line workers have you been able to retain during the past two years of stop-and-go production? It must have been hard to hold on to a skilled workforce under such conditions, where layoffs became almost an everyday occurence. While it's true that we did lose some personnel, we've managed to hold on to the overwhelming majority of them, and I sincerely appreciate the personal loyalty they've demonstrated by remaining faith- cue I ... n ....... S • APRIL 2,2003 31