INTERVIEW
MV AGUSTA PRESIDENT AND CEO GIOVANNI CASTIGLIONI: PART 1
P90
for the two brands, but then the
global economic crisis arrived
soon after they acquired MV.
So, when in 2010 Harley tried to
sell the company, nobody really
wanted to invest in the motor-
cycle industry, where the market
was shrinking by half.
But partly for pride and partly
for passion, my father said okay,
let's try to re-acquire MV Agusta,
even though I tried to talk him
out of it, saying, "look, it was
smart to sell in 2008 due to the
weak financial resources that
we had for a business that is
super capital intensive, even
with only just two models, the
F4 and the Brutale, so I don't
think it's a smart decision now
to re-purchase MV Agusta."
However, he was really eager to
do this, so we made a business
plan, and decided we needed an
investment of 80 million Euro to
rebuild the company to where it is
today. However, we still had cash
credits outstanding that Harley-
Davidson owed us but had not
yet paid, and these amounted to
more or less 80 million Euros.
So we said to Harley "Okay, don't
give us that money, but instead
give us 20 million Euro [then
around $26 million—AC] plus the
company," which was valued at
60 million or so, and we injected
the 20 million back into the
company. So then we restarted
MV Agusta with 20 million Euro of
capital and a pretty clean balance
sheet, but then I had to leverage
another 60 million to arrive at that
80 million Euro of needed invest-
ment, and that was not so easy.
Because back in 2010 no-
body wanted to lend money?
Firstly that, but then secondly
it was very difficult to borrow
money on just a piece of paper
and lots of good intentions, even
with a clean balance sheet and
a premium trademark. I spent
three years going around visiting
banks and private equity com-
panies, and especially the first
two years, 2011 and 2012, I was
getting nowhere. I'd tell them, this
is my plan, I'm doing a new three-
cylinder engine, first a 675 and
then in the future an 800, it'll be a
great bike. Everyone was saying
to me, "Okay, good, come back
in a couple of years' time, let's
see if the market has recovered—
oh, and by the way, who else
Giovanni admits the
partnership between MV
Agusta and AMG has been
a "total failure."
