Cash-flow problems appear to be the main reason that Bavaria Yachtbau, Germany’s largest boatbuilder and one of the biggest globally, proposed to place itself into administration following a hearing at the Wurzburg Commercial Court last week.
The lack of finance means that the company – which produces 1,000 boats per year, both sail and motor – is effectively insolvent and has had to stop making payments to suppliers.
Bavaria’s 600 workers in Germany and its management team will be retained for now. However, CEO Lutz Henkel has left the company, allegedly having been dismissed.
Nautitech, the French multihull-builder acquired by Bavaria three years ago, is not part of the administration process but its future must be uncertain. A press conference for Nautitech, which was due to have been held at the recent International Multihull Show in France, was cancelled at the last minute, causing some concern over the reasons behind the move.
The picture that is emerging is that Bavaria has been in a challenging financial position for some time and that its level of debt has been increasing rather than declining. In its 2015/16 accounts, Bavaria had negative equity of over €200m. The company was in the process of modernising its range, which was reflected in new models that premiered at the Dusseldorf boat show in January.
There has reportedly been a good response to the new models and Bavaria’s order book is reported to be strong. It appears that as the financial pressures increased, Bavaria’s two parents – US private equity companies Oaktree and Anchorage – felt enough was enough and withdrew their funding support.
Until word comes from Bavaria of its actual situation, the market can only speculate about the facts that are known. Bavaria’s current plight, however, is a serious blow for the boating industry worldwide.