New Agusta deal leaves egg on Proton's face
BMW said to have paid 93m euros for just one brand!!
By S JAYASANKARAN IN KUALA LUMPUR
Published August 21, 2007
THE management of national carmaker Proton may have erred
disastrously by selling loss-making and indebted Italian motorcycle
maker MV Agusta Spa for one euro back in 2005. Last month, the new
owner of Agusta sold just one of its three brands to German carmaker
BMW, allegedly for 93 million euros (S$192 million).
___________________________________
Dr Mahathir: Vindicated of his bitter
opposition to the Agusta sell-off in 2005
___________________________________
While it is clear that BMW did buy the Husqvarna brand from Gavi Spa,
the mysterious Italian-registered company that bought Agusta in 2005,
the pricing was never revealed. Still, a car industry executive told
BT that the 93 million euro price tag was 'entirely possible'.
If true, the Agusta purchase would have been an enormously lucrative
one for Gavi and will cast Proton's management in a dreadful light.
The Agusta sell-off would also vindicate former prime minister and
current Proton adviser Mahathir Mohamad who was bitterly critical of
Proton's decision to sell the motorcycle maker.
In fact, the former premier was so angry about the sale that he even
wrote a letter of complaint about the deal to the Securities
Commission, the regulator of the markets. Nothing, however, came of
it.
Proton, then under the stewardship of a Dr Mahathir favourite, Tengku
Mahaleel Ariff, bought Agusta for 70 million euros (then roughly
RM368 million or S$152 million) in December 2004. Even so, the deal
also came with a substantial, although unspecified, amount of debt.
Agusta's financial position was quickly revealed in the carmaker's
books subsequently. For the year to March 31, 2005, Proton wrote off
the entire RM368 million it spent on Agusta. It subsequently made
provisions of RM136 million relating to Agusta over the next three
quarters.
In July 2005, Tengku Mahaleel stepped down after months of wrangling
with shareholders and the government. Meanwhile, Dr Mahathir publicly
criticised Proton's treatment of Tengku Mahaleel and refused to
attend Proton meetings in his capacity as adviser.
Deprived of its two biggest supporters, Agusta didn't last long. Five
months later, it was sold for less than RM5 to the mysterious Gavi
which agreed to take on its debt estimated then at 60 million euros.
Proton has yet to comment on the matter but the revelations of
Agusta's seemingly rich valuations of its brands are likely not only
to hurt Proton's management but its primary shareholder, state-owned
Khazanah Nasional, which supported Agusta's sale.
It will also embarrass Prime Minister Abdullah Ahmad Badawi who
implicitly criticised his former boss, Dr Mahathir, by publicly going
to Proton's defence. Nor is it likely to impress German carmaker
Volkswagen AG which is on the verge of taking over the Malaysian
outfit.
Source : Autoworld
BMW said to have paid 93m euros for just one brand!!
By S JAYASANKARAN IN KUALA LUMPUR
Published August 21, 2007
THE management of national carmaker Proton may have erred
disastrously by selling loss-making and indebted Italian motorcycle
maker MV Agusta Spa for one euro back in 2005. Last month, the new
owner of Agusta sold just one of its three brands to German carmaker
BMW, allegedly for 93 million euros (S$192 million).
___________________________________
Dr Mahathir: Vindicated of his bitter
opposition to the Agusta sell-off in 2005
___________________________________
While it is clear that BMW did buy the Husqvarna brand from Gavi Spa,
the mysterious Italian-registered company that bought Agusta in 2005,
the pricing was never revealed. Still, a car industry executive told
BT that the 93 million euro price tag was 'entirely possible'.
If true, the Agusta purchase would have been an enormously lucrative
one for Gavi and will cast Proton's management in a dreadful light.
The Agusta sell-off would also vindicate former prime minister and
current Proton adviser Mahathir Mohamad who was bitterly critical of
Proton's decision to sell the motorcycle maker.
In fact, the former premier was so angry about the sale that he even
wrote a letter of complaint about the deal to the Securities
Commission, the regulator of the markets. Nothing, however, came of
it.
Proton, then under the stewardship of a Dr Mahathir favourite, Tengku
Mahaleel Ariff, bought Agusta for 70 million euros (then roughly
RM368 million or S$152 million) in December 2004. Even so, the deal
also came with a substantial, although unspecified, amount of debt.
Agusta's financial position was quickly revealed in the carmaker's
books subsequently. For the year to March 31, 2005, Proton wrote off
the entire RM368 million it spent on Agusta. It subsequently made
provisions of RM136 million relating to Agusta over the next three
quarters.
In July 2005, Tengku Mahaleel stepped down after months of wrangling
with shareholders and the government. Meanwhile, Dr Mahathir publicly
criticised Proton's treatment of Tengku Mahaleel and refused to
attend Proton meetings in his capacity as adviser.
Deprived of its two biggest supporters, Agusta didn't last long. Five
months later, it was sold for less than RM5 to the mysterious Gavi
which agreed to take on its debt estimated then at 60 million euros.
Proton has yet to comment on the matter but the revelations of
Agusta's seemingly rich valuations of its brands are likely not only
to hurt Proton's management but its primary shareholder, state-owned
Khazanah Nasional, which supported Agusta's sale.
It will also embarrass Prime Minister Abdullah Ahmad Badawi who
implicitly criticised his former boss, Dr Mahathir, by publicly going
to Proton's defence. Nor is it likely to impress German carmaker
Volkswagen AG which is on the verge of taking over the Malaysian
outfit.
Source : Autoworld
