April 1, 2010

blogger - Financials

The recession which started in 2008 is a full proof truth that the marriage between financial institutions (banks, funds, equities etc) with boat building is never a good one. Nearly all builders who in the booming past years where sold out to any financial company finished in distress situations, with some only being saved because the old founding management was present. Such is the case for example with the Ferretti Group.
Last month we also had the news that down under boat builder Mustang has gone into voluntary receivership. The company is currently owned by Standard Asia Bank Ltd from South Africa and is recognized as one of the top three production motor boat builders in Australia along Riviera and Maritimo. This is the second time Mustang goes into receivership in recent years being in a similar trouble before the recession in early 2008.
My big surprise in all this is that as in January Mustang was really looking for a good 2010 year presenting an entry level sports cruiser at the start of the year, and having plans for two bigger fifteen metre plus models with one of them to be launched in Australia second sized Sanctuary Cove boat show coming May. More growing signs where shown when Mustang management purchased the molds from other down under bankrupt boat builder Warren Yachts.
The lesson to take in this difficult period facing the global economy is that these financial institutions only saw a fast buck in the marine industry which prior to this had a double digit growth for a couple years. Now nearly all of them have over leveraged the companies they bought in the booming years causing a delicate environment which is still troubling the boat building industry as a whole. Curiously these financials which have not enough knowledge of the boating world scenario try to sell the company to the previous owner, or ask his help, or in a worst case scenario liquidate everything.

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