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/1542268
Eritff' E o o o o No Max, No Camel Camel made it official ,u5t prior to Christmas that after three years totethec the tobacco company will no lonSer back the Honda Pons team in the MotoGP World Championship. .Over the last three years, Camel, together with Honda and the Honda Pons Team, have achieved many successes in the premier class ot theWorld Road Racing Championship," the release from Camel stated, "However, recent differences of opinion with the r+anese manufacturer concerning the doice of riders has meant that the 2006 project, in which Max Biaggi was planned ro ride for the Camel team, has not been able to take ofl Japan Tobacco lnternational, proprietor ofthe Camel brand, considers the veto against the rider as unjustilied from many points ofvieq and has thus decided to break off relationshipc in f{orocP with Honda and with the Pons team." "We put considerable energy and great determination into the flotocP proiect with Max [BiagSi], even when it became quite clear that this could not be done with Honda. ' said Roberto Zanni, president ofJapan Tobacco lnterna(ional Europe, "but in the end it proved impossible. The obstacles we found oursehes up atainst were various, decisive, and, in a sense, inexplicable. lt seems that the sporting spirit, which has always been part of motorcycle racing and which has given the public its great passion for this sport, had suddenly disappeared. lt is this passion for sport which, on the contrary remains a driving force for our group, the philosophy on which we have based all our activities in the world of motorsport, I should like to D a DoNBHffi!.. T OVER I ( o \"- t o6 ( r 5UZUl0 ,filllA'AII (t 1 \\ Malaysian car manufacturer Proton has disposed of the controllint 57.75-prcent rnalority interest in ltaly's histori. MV Agusta bike marque (which includes the Husqvarna and Cagiva brands), which it acquired for Euro 70 million ($83 million) from the Castiglioni family in November 2004. On December 27. Proton announced that it had abandoned its shon-lived plan to expand into the motorcycle business by selling its stake in l4V Agusta to GEVI SpA, an ltalian invest- ment house, for a nominal one Euro! Ol course, there is mor€ to the deai than that. GEVI also assumes responsibility for MV's Euro 32.5 million ($38,5 mil- lion) working capital requirements, as well as its Euro 107 million ($127 million) outstanding debr, wlich, contrary to earlier reports, had not in fact been paid oll by hoton in the past year since it acquired MV lnstead, Proton had agreed to a rcstructuring of Pfvfs debt with the three principal d€bror bank, which foresees gradual repayment of debt plui inter- est over an eighr-year period, and GEVI is now responsible ior this. Ttre sale comes in the wake of hctional irfighting at the top of Proton. which has rezuhed in a management reshuflle, fueled by the alarmint slump in sales in irs core Malaysian home market, which has seen Protods market share of total domesti< auto sales rlump from 73 percent in 2000 to 45 per- cent in 2003, and now to a mere 30 percent in 2m5 in the face of irrcrEased competition at a time wfien Malaysia is set to fult open its long-sheltered automotive market to foreign competition by 2008, when tarifrs will b€ slashed to promote free tmde in the ASEAN zone. Proton is hoping to col,rnter this with the sale ofa strategk equity stake in the company to Volkwagen, with whom it signed a coop€ration agreement (in Noyember 2004) aimed at helping speed development of new models in order to lift overseas sales and rcgain mark€t share at home. The t'lv Atusta sale is clearly targeted at clearint the deck of Proton's non-core business to make such a deal more attractive for the German car maker, after hoton shocked inveitors with a staggering half-year lors to the end of September 2005 of some $36.39 million, compa.ed with a net profit of $86.19 million one year ago. This came on the back ol a 23-p€rcert reduction in tumover, thank to the ste€p declina in Proton car sales: for the 12 months ending in Octobe[ Proton sold iust 97,580 cars in tota], of which 6201 went abroad - a pretq/ smallvolume by global standards for a group with 9000 employees. SpeakinS at a press conference on November 29, Proton chairman Datuk Mohammed Azlan Hashim attributed the company's losses to the rise in component pnces, reduction in ma€ins. and the $37 million in provisions arising mainly from MV Agusta, of which $21 million relared to doubtful debts unlikely to be recovered, as well as unpaid supplier debts held over from before the Proton takeover. The provi- sions also covered 3000 engines in the MV Agusta invenlory (whose waranty had lapsed, he said) and $8.5 million related to a mismatch of warranties b€tween customers overseas and ltalian component suppliers. Azlan said that, since buying a controlling stake in f,lv Agusta in December last year, Protofl had spent an additional $ I 18 million on th€ ltalian sub- sidiary as a result of losses and wdte-offs. ,,t tie time of the purchase last year, Proton saw MV Agusta as an opportuniq/ to gain &ces5 to a global brand "and access to €ngineerint and desiSn expertise," he said, adding that, from a linancial perspective, "the investment had not met expoctations." Proton's board has evidently now decided to cut its loss€s, and to sell tlv to GEVI for a nominal sum. At a tirn€ when ttv Agusta is tr.ding profitably. with sales up 18 percent over one year ago, lull order book, and a record claimed 34,000 motorcycles produced at its Caslinetta Iactory in 2005 by its 400 employeer (split between its three MV Agusta Cati'ra and Husqv".rna h-ands), the repatriation of ownership of the rnotorcyale marque, rea- ognized universalt in the country as "the Ferrari of two wheeb," has been welcom€d bI the financial and business communitl in ltaly. New owner GEVI - based in Naples, wfiose name is the ltalian GV acronym lor Generozione yincente, or "Victorious Generation" - was tounded in lg97 as lhe investment branch of the Carite Bank Group head- quartered in Geno4 a relativet conservative, A-rated finan- cial insthution, and as such the approval of the purchase by the bank5 holding l4V Agusta's debr is expected to be a for- mality. lndeed, there's a suspicion that the three principal banks concemed (lmesa, BPU, and lntra) had a hand in the GEVI deal, ensuring that once Proton's new managemem declared its intent to divest itself of f4V it went into hands that they were comfortable with. That comfort extends to MV fuusta president Claudio Castiglioni. whose family cominues to own 37,25 percent of the company's equity, alonSside Massimo Tamburini's 2 per- cent and the l-percent balance held by Swedish conglomer- ate Electrolux - the former owners of Husqvama motor- cycles- lnterviewed after the sale was announced in Kuala Lumpun a seeminSly relaxed Castiglioni proclaimed himsell "molto, fiolao sereno" (very content) with the !-ansaction. while refutint the suspicion voiced by some in ltaly that GEvl is actinS as a tront for Piaggio owner and takeover tycoon Roberto Colaninno. "l ve heard that rumo( and that's not the case - there's no connection between them at all," Castiglioni said. "Ever since it became appareot in July that the people in Malaysia l'd ertablished a strong relationship with over the past two years had ended up on the losinS side in the civil war at Proton, I've been workin8 !o ensurc that MV Agusta's future was not co.npromised by tiis. I'm very happy that GEVI has pur- chased the l4alaysian shareholding in our company, because these are serious busine$ people with a deservedry positive reputation in the ltalian banking industry Their arriv-al will help comolidate the secure basis on which I'lV Atusta now stands, and while it's too early to conllrm the level of invest- ment GEVI intends to make in the (ompany, I know they are aware of the continuous need to develop our rante of nrod- els- I amicipate an increase in capital of Euro 15 to 20 million to help maintain our products as the most desirable in the marketplace, and to cofltinue the focus on quality, which is at the heart of our success," However, whe*er GM's arri\ral will free up the aash to und€rwrh€ Castiglioni's plans to relaunch the Cagiva marque with a new range of dedicated V-wvin engnes, whiah would also power hiSh-end Husg\rarna models airned at the KTl4 950 Adventure and 950 Supermoto, remains to be decided, But for surc, the present uncertainq/ over dle new owner's plans for the company places a question mark over HV Agusta's plans to retu.n to the Ecetrack in 2007 with a full factory-supported team lor the World Superbike Championship. "l'4y hands are still firmly on th€ steering wheel of MV AturE," Castiglioni insisted, "and it's rny dut/ to focur totalry on maintaining and expandinS our growth in $les volume in the immediate future, Although it's well known I m a diehard competition enthusiast, I won't spend a cent in 2006 on goint racint. All that matters right now is production and consoli- datjnS our position at the top of the European iportbike and off-road market. We'll take a look at doing something in 2007, but nothing at all for at least one year." Non Coth<.art EUROFILE Proton Sells MVAgusta - Fora Dollar?! 1 a 8 JANUARY I I,2006 . CYCLE NEWS