Table of contents
- Norton sold to TVS for £ 16 million John Russell named interim CEO
- John Russell Interim CEO at Norton
- The Norton drama
- High investments in production
- Numerous prospective buyers
- Fraudulent pension funds
- Total debt is over 30 million euros
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Norton sold to TVS for £ 16m: John Russell new CEO
Norton sold to TVS for £ 16 million
John Russell named interim CEO
Norton went bankrupt after financial problems. Now the Indian two-wheeler manufacturer is taking over TVS for 16 million.
The takeover of Norton by TVS was confirmed by the insolvency administrator BDO as well as by TVS. The purchase price was given at 16 million pounds (the equivalent of 18.4 million euros). TVS wants to hold on to the Norton Donington site and also take over the workforce. However, the Indians did not take over the Norton properties with the purchase price. One is there for rent and will look around for a new location in the vicinity at short notice. The Indians are also planning to continue production of the current series. In addition, they want to finally go into series production with the new models for the new 650 twin-cylinder. With the international distribution network of TVS Norton will also get access to new markets. The Indians will not settle the Norton debts from the pension funds. These are to be covered from the sale of the various Norton buildings. Commenting on the Norton acquisition, Sudarshan Venu, Managing Director of TVS Motor Company: “This is a meaningful time for us at TVS Motor Company. Norton is a UK brand known around the world and it presents us with an immense opportunity. This transaction is in line with our efforts to meet the aspirations of discerning motorcycle customers. We will fully support Norton to regain its full glory in the international motorcycle landscape.”
John Russell Interim CEO at Norton
TVS has named John Russell, who previously served as both Vice President and General Manager of Harley-Davidson Europe and previously at Land Rover, as temporary managing director. So Russell knows the industry. It should now be up to him to set the course for the Norton future under TVS and to ensure that the Norton brand can regain trust.
Norton is hiring new employees
The new owners and the CEO don’t waste any time: Norton recently posted 15 jobs. We are looking for employees in a range of technical and administrative positions, including quality manager, senior designer, and senior drive technician. “We have started planning for the restart of the company and we want to fill some existing positions as well as expand the company’s capabilities”, John Russell, Interim CEO of Norton, told MCN’s UK colleagues. The hiring of 15 employees increases the current workforce of 55 employees by more than 25 percent. And it sounds like one or two job advertisements will follow: “The positions we recruit for include the entire organization, technology, operations, sales, marketing and service. Initially, we plan to fill around 15 positions and will have more hiring rounds when Norton reaches its full potential.”, says CEO John Russel.
TVS Motor Company
The TVS Motor Company is part of the TVS Group, which has annual sales of around $ 8.5 billion and bundles around 90 companies under one roof. The Indians look back on 100 years of company history and are present in 60 markets worldwide. TVS also produces the G 310 R and G 310 GS models for BMW. TVS is also one of the largest Indian automotive suppliers.
The Norton drama
In early January 2020, Norton had hit the headlines and troubled over a tax liability of £ 300,000. Norton ex-Boss Stuart Garner had to answer questions from a British bankruptcy judge about how the motorcycle manufacturer imagines the reduction of tax debts. The original tax liability is said to have been as high as £ 600,000, but half has already been paid in the short term. The motorcycle manufacturer asked for a 63-day delay in payment and also cited expected tax returns and subsidies of around £ 135,000. The responsible bankruptcy judge has initially postponed the matter to February 12, 2020. Then you wanted to continue negotiating.
High investments in production
At the end of January 2020, Norton Motorcycles opened insolvency proceedings due to insolvency. Obviously, the high investments for the upcoming series production for the new two-cylinder as well as the V4 models forced the small series manufacturer financially to its knees. It was only at the end of 2019 that Norton had raised money for the upcoming production of the new models via crowdfunding. An unnamed major investor then provided capital of one million pounds. However, this investment does not seem to be sufficient to implement the production plans. The production systems for the two-cylinder are still a construction site, as is the supply chain for a possible production.
Numerous prospective buyers
Since February, the motorcycle manufacturer has been under administrative administration by the auditing company BDO. Norton currently has around 100 employees. According to the insolvency administrator BDO, there were a total of 331 expressions of interest from various sides to want to take over the ailing motorcycle manufacturer. Only a few of them wanted to be examined more intensively and, if necessary, negotiations started. Potential buyers could contact BDO until March 25, 2020. Ex-Norton director Steve Murray is said to have been among those interested in a takeover of Norton. Murray is likely to lose around 1.5 million euros that he has invested in the motorcycle manufacturer if the company is wound up. The Indian two-wheeler manufacturer TVS was also traded as a buyer in advance.
In 2012, four years after Stuart Garner took over Norton from American businessman Kenny Dreer, Norton was on the verge of bankruptcy. Two other Stuart Garner companies are currently in insolvency proceedings.
Fraudulent pension funds
In addition, the British media reported that they were involved in a pension scandal. Norton ex-boss Garner is said to have set up three pension funds through an external company and collected millions of euros, all of which flowed into the motorcycle manufacturer and were not invested long-term and securely as agreed. A sum of 14 million pounds is rumored, which was fraudulently embezzled. Meanwhile, a pension fund victim has one Online petition initiated, which calls on the British government to question Norton ex-Boss Stuart Garner about the incidents and also to compensate for the pension losses.
In addition, the British government is said to have provided funding of around six million euros over the years for Norton Motorcycles and the British Motorcycle Manufacturing Academy, which is also controlled by Garner. In addition, the insolvency administrator BDO reports on creditor claims amounting to around 950,000 euros, which flowed into the company as customer down payments for motorcycles that were never delivered. Since the second week of February, production at Norton has also been closed. The employees are still paid, however.
Total debt is over 30 million euros
As the British Superbike magazine now claims to have calculated with an insight into the files of insolvency administrator BDO, the liabilities of all Norton activities are over 28 million pounds (the equivalent of around 31.5 million euros). Around £ 6.3 million of this weighs on the motorcycle manufacturer. This contrasts with a capital of 300,000 pounds (336,000 euros) at the time of bankruptcy.
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