In a statement released last night, German boatbuilder Bavaria Yachtbau announced that the District Court of Würzburg yesterday ordered provisional self-administration for the company, which means that management will remain fully operational and all wages and salaries will be secured until June 2018.
The company said its top priority for the administration period is to seek an investor for the business. In the meantime, the builder will continue production and deliveries aimed at processing “a high order backlog” for the next few months. "In the current situation, we want to supply our customers with the usual high quality," said chief operating officer Erik Appel.
According to the announcement, the company will look for both a strategic and financial investor to put the operation on a sound financial basis, against the backdrop of Bavaria’s ‘good market positioning’. Appel added, "We have years of experience building high-quality yachts and are industry leaders in technology in many areas.”
Dr Hubert Ampferl of the law offices of Dr Beck & Partner, which specialises in insolvency administration, has been assigned as the provisional administrator. In addition, restructuring expert Dr Tobias Brinkmann from Brinkmann & Partners has joined the management board in the wake of former CEO Lutz Henkel’s departure from the company last week.
Bavaria’s 600 employees were informed of the company’s situation on Friday, when the builder also sent an announcement to its dealers.
Today’s statement clarified that the court application for self-administration relates exclusively to Bavaria Yachtbau GmbH, and that its French subsidiary Bavaria Catamarans SAS in Rochefort will carry on business as usual.
Bavaria Yachtbau was founded in 1978 and is one of the industry's leaders in motorboat and sailboat production, and more recently added catamarans to its portfolio. In the company’s last filing of financial accounts for the year ending July 2016, Bavaria reported consolidated turnover of €112.3m, down marginally from €113.4m the previous year. The company posted a net loss after continuing operations for the 2016 finanical year of -€31.7m (after tax).
Although not officially confirmed, Bavaria's 2017 turnover is presumed to be on an upward swing based on reported sales and production levels which the company suggested earlier this year was nearing 1,000 units a year.
At its peak in 2006, Bavaria had annual turnover of €271m and produced close to 3,000 boats primarily in the 30ft-40ft range. Bain Capital purchased Bavaria in June 2007 from its founder Winfried Hermann and one of the company’s top dealers Josef Meltl for approximately €1.3bn, a multiple more than 16 times EBITDA of €79m (earnings before interest, tax, depreciation and amortisation). The purchase came at the end of a hotly contested bidding process among competing private equity firms.
Bavaria’s current owners, Oaktree Capital and Anchorage Capital – both specialists in distressed debt – agreed to jointly acquire and restructure the business in October 2009, for approximately €300m including a cash injection of €55m and write-down of debt facilities totalling about €960m at the time, with each gaining a 44% ownership share. A minority stake of 11.2% is held by a “Lenders Pool” of shareholders.