Monday, 10 Dec 2018

Bavaria Yachtbau before the end?

Bange weeks lie before the employees of the once largest German sports boatyard. As several reliable sources have confirmed in the meantime, the management of Bavaria Yachtbau filed for insolvency.

The need for liquidity was apparently too great recently to compensate for the accumulated losses. Therefore, the shareholders of Oaktree and Anchorage have decided to cease all liabilities for the maintenance of the business.

Its holding has been over-indebted for a long time. The loans amount to several hundred million euros – a mountain of debt, which was caused by the once overpriced purchase of the shipyard, but also by many years of deficits since then.

Lutz Henkel

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Came from Salona: The former Bavaria CEO Lutz Henkel

The main responsible for the current imbalance, CEO Lutz Henkel, had to vacate his post after YACHT information earlier this week. It was initially said that the shipyard and its management spokesman, who had been employed since the beginning of 2015, had split up “by mutual agreement”. In fact, it was not a farewell in harmony. Too big were the holes in the balance sheets.

For the international water sports industry, the news came as a surprise. After a lean few years, most shipyards have been experiencing steadily improving demand since 2016. Almost all large series yacht manufacturers are plagued by production bottlenecks rather than a shortage of orders.

Also Bavaria had recently celebrated with jubilee messages its own fair successes and announced a “sales record” after another. Of course, that’s how it turns out, it was just whistling in the woods. The gigantic appearance at boot Düsseldorf in January (“Bavaria World”) as well as various innovations should demonstrate their strength to the outside world.

The product range was supplemented by the C 45 and C 50. On top of that, Henkel triumphed with a new flagship, the C 65, which was supposed to expand the brand. However, this was just a remake of the already long-hapless Salona S 650, which should be upgraded by another deck and new interior.

Too much of the good and the big? There are some reasons for that.

For Henkel’s strategy meant a repositioning of Bavarias against the better-placed competition – and the abandonment of their actual brand essence to build cruising yachts with unbeatable value for money.

Also internally there were recognizable problems. Insiders reported serious production and delivery issues last year after the proven assembly line method had been modified. For example, from the C57 presented a year ago, only four units will have made it to delivery in one year, with a significantly higher order backlog. Also, the shipyard has been waiting too long with the renewal of the fleet and instead tried to sell inventory models with large discount campaigns.

The takeover of the French catamaran brand Nautitech in 2014, driven forward even by Henkel’s predecessor Constantin von Bülow, is rated as a success. This company’s tenderloin could be exempted from the procedure because of the continued boom in the cat market and the location of the La Rochelle shipyard on the French Atlantic coast, as the operation is highly profitable. He would also be a good to divest company part, should not find a buyer for the entire company construct.

How it goes on, decides probably on Monday, the district court in Würzburg, in which the bankruptcy petition was filed. The employees at the Giebelstadt site were informed today. There was a glimmer of hope. Accordingly, all employees should initially continue unchanged; at least for a period of three months their jobs are secured. Because there are enough orders.

Achieving the company’s continued existence at the outset could minimize losses for owners and dealers who have paid boats and for suppliers who have gone into advance.

This article has been supplemented and revised as new information becomes available in its original version. YACHT online will continue to report on the progress of the process on an ongoing basis.

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