Gas Gas Goes Into Liquidation, Search To Find Buyer Begins
The financial problems surrounding Gas Gas appears to have no signs of abating anytime soon after the company announced its failure to renegotiate its mounting debts. With its options dwindling by the day, the Spanish enduro and motocross bike manufacturer has relented on proceeding with the liquidation of its assets.
In a letter sent to its “customers, partners and friends”, Gas Gas admitted going through numerous legal proceedings to get its house in order. It’s tried to renegotiate its debt and find investors willing to help with its financial woes. It even received a loan from the Spanish government, which is incredible considering how much the economy in Spain is struggling these days.
Yet none of those avenues ended up working for the company, forcing it to finally concede to selling its production unit, including its factory, to prospective buyers. It’s a similar step taken by Erik Buell Racing when it announced its own bankruptcy back in April 2015.
Where Gas Gas goes from here is anybody’s guess. While I’m hoping that there’s still some chance that we see the company come back, it’s become increasingly difficult to see the forest for the trees, especially when the company seems to have exhausted all of its options with little success.
The only avenue that appears to be available is to sell off its production unit, something the company said it’s going to do at the soonest possible time to “ensure a solid and sustainable long term viability of the company.”
Right now, those words are ringing hollow, but like most optimists, I’d like to believe that Gas Gas can survive this latest setback and come back in one form or another.
Continue reading to read more about Gas Gas’ latest financial setback.
Why it matters
I want to remain hopeful for a company that has endured so much turmoil simply because it seems inhumane to wish ill will on somebody else. But I have to say it, too. Whatever optimism and hope I have for Gas Gas is dwindling by the day.
It would be a huge victory if the company can sell off its production unit quickly. Not only would that allow Gas Gas to reactivate its factory and allow it to continue producing its motorcycles, but more importantly, it would at least help in ensuring that the company remains relevant in some capacity.
From an investor’s perspective, acquiring Gas Gas on the cheap could end up being a shrewd purchase. If said investor can take care of the company’s debts, it could be sitting on an ownership stake of a brand that can technically restart production at a whim.
Whether a company does bite the bullet is another thing entirely. We’ve seen episodes like this in the motorcycle industry in the past so it’s not really out of the realm of possibility that something like this can happen.
There have even been rumors that KTM was looking to step in and purchase Gas Gas’ production unit, although the Austrian motorcycle giant has thus far denied said rumors. If that’s not an option, there’s also the possibility of a Chinese group coming in as a prospective buyer, similar to Shineray’s purchase of SWM.
However this plays out, I just hope that Gas Gas somehow survives this harrowing ordeal. I don’t want to see a company close down for good because nobody thought it was worth investing in it.
That’s not a good look for the industry as a whole.