Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/128364
V Agusta's future ~as now been settled, with the prestigious Italian manufacturer, which has been under administration for the past two years, now finally taken over by Malaysian car giant Proton. The deal, originally announced in outline form on July 7 last year, marks the successful outcome of extended negotiations between MV boss Claudio Castiglioni and the Proton board, which approved the purchase on May 25, subject to the consent of the Italian court-appointed administrators then charged with supervising MV's operation. After due diligence, this was forthcoming on November 16, when the amministrazione control/ata temporary receivership proceedings under which the insolvent MV Agusta Group had been operating since January 10, 2003, were lifted by the bankruptcy court. This was done after it was determined that the company had succeeded in trading its way out of insoivency, and that thanks to positive cash flow and an increase in capital, it was now solvent and in a position to meet its outstanding debts while resuming normal trading. The deal with Proton sees the 59-year-old Castiglioni remaining as president and CEO of MV Agusta, ensuring that he'll continue in overall supervision of the company's operations. He will do so together with his son Giovanni, who, since graduating from business school in London in 2002, has been working closely with his father in turning MV Agusta around. Proton's vital importance in undervvriting MV's future development, by providing the funds to finance the development of new models and expand its commercial operation, is thought unlikely to extend to distributing MV Agusta motorcycles through Proton car dealers. Previously, in October 1996, Proton acquired Britain's equally prestigious Lotus four-wheeled marque - like MY, it is an illustrious multi-GP and World Championship title-winner that had fallen on hard times - but has so far resisted combining it under one roof with Proton distribution, maintaining a quite separate worldwide Lotus dealer network for the 2000 sports cars which the Norfolk-based firm produces annually. The takeover announcement follows a ceremony in Kuala Lumpur on October 28, 2003, when Proton CEO Tengku Mahaleel Ariff signed a letter of intent with Claudio Castiglioni to purchase what was originally represented as a 50-percent stake in the historic bike marque. The ceremony took place in the office of Malaysian Prime Minister Dr. Mahathir Mohamad and was witnessed by him just three days before he finally stepped down from office after a stellar, 20-year career leading his nation. Speaking to reporters later, Dr. Mahathir said this was the right move for Proton, as it would enable the company to enhance its full range of products. "The world is becoming so competitive, we must keep looking all the time for niches so that we can become first class in these areas," he said, "and MV Agusta is certainly first class." Proton, which was formed only as recently as 1983, has been seeking to expand up market to strengthen its corporate and commercial image, as well as to broaden its range of products. At the time of signing the letter of intent, Ariff stated that MV would combine with Lotus and other future acquisitions in expanding Proton's core motor vehicle business to represent a Significant segment of the company's operation - which currently positions it as continental Asia's second-largest car manufacturer and also as a publicly-quoted company, 30 percent of whose stock is held by the Malaysian government, the rest quoted on the KL stock market. Proton's 2003 balance sheet revealed a turnover of euro 1.5 billion (just over $1.96 billion), yielding a net profit of euro 114.5 million (just over $149.8 million), produced by the firm's 9000 employees, against MV Agusta's 2004 volume of euro 160 million (about $209 million). Ariff declares Proton M