In a twisted case of impending debt, the Italian court in Pesaro declared motorcycle maker Benelli as bankrupt in a ruling after the company failed to settle its dues with a component maker. The court order was made despite the fact that the bike maker offered to pay his debt to the company and claimed to be able to have sufficient funds to clear its dues, which makes the ruling all the more bizarre.
Benelli owed component maker WP Suspension (part of the KTM Group) an outstanding payment of 1,20,000 euros for suspension pieces, which the Italian company failed to pay in time. As a result, WP decided to take Benelli to court in a bid to recover its payment. The Pesaro court made the ruling in favour of WP Suspension and declared Benelli bankrupt while ordering the latter to pay the amount it owed to the company. In the process, a trustee also confiscated manufactured Benelli bikes in Italy as collateral for the outstanding payment.
Benelli TNT 600i ABS
Clearly, the entire episode did not go down well with Benelli's parent company Qianjiang (Q.J.) Group from China, which led to the company releasing an official statement clarifying that the Italian motorcycle brand is strong in terms of finances and has enough cash to repay its debts, rumoured to be in the vicinity of 1 million euros. The company also stated that it is in the process of repaying its current dues. Benelli has appealed for the decision to be averted in the Court of Appeal of Ancona in Italy.
While the incident does not paint a pretty picture for Benelli, the bike manufacturer certainly doesn't look like its going bankrupt despite having had a long list of owners in the past. Unlike other individual Italian motorcycle brands, Benelli is backed by Chinese giant Qianjiang Group, which was able to revive the legendary the company, helping it grow steadily ever since. Financially, Benelli may not be in their A game with the company having claimed a loss of 8,00,000 euros in 2014, which went up to 5.7 million euros in 2015. Nevertheless, the strong backing from its parent allows the brand to have more breathing space than stand alone bike brands.
Benelli Leoncino
Another factor that does not support the bankruptcy claim is Benelli's aggressive expansion with newer products and markets. While the company is one of the fastest growing premium motorcycle brands in India, it has also been expanding in newer countries with the most recent one being the closely guarded Iranian market. Moreover, the bike maker showcased a host of new and promising products at the 2015 EICMA Show last year, with new motorcycles also under development. Lastly, Benelli as a brand with its Italian history holds more value for the Q.J. Group, something it might not want to let go so easily.
Source: ilfattoquotidiano.it
