Bavaria back from the brink as new owner takes control

German boat builder Bavaria Yachtbau has been thrown a lifeline after an investor bailed the company out of potential bankruptcy this week, the company has announced.

The company revealed overnight that a German private equity fund that specialises in turning around companies in distress would take over the sail and powerboat maker, and its closely aligned catamaran subsidiary, with all 800 employees in Germany and France keeping their jobs.

"We are convinced of Bavaria's global market potential and will sustainably develop the company,” Kai Brandes, the managing director of CMP Capital Management-Partners and bavaria’s new owner, said. “The restructuring measures will focus on regaining market share and improving production costs.”

The cash-strapped Bavaria Yachtbau, one of the largest boat builders globally, fell into voluntary insolvency in April after making a huge investment in its production facilities, but throughout its insolvency remained committed to fulfilling its bank of orders made before it hit financial strife.

Since April, it has delivered 220 yachts to customers.

Bavaria Australia managing director Tony Ross said the announcement was good news for the company after sales tapped the brakes in the wake of the April revelation.

“I can’t say that we’ve been doing great sales [since Bavaria’s insolvency announcement],” he told boatsales.com.au. “I think a lot of people have been waiting to see what will happen, but our biggest problem was that we didn’t have anything new for the Sydney Boat Show – that sort of slowed up sales.

“But I think we should see a big resurgence shortly.”

Ross said his brokerage had three of Bavaria’s new sailboats arriving in Melbourne that were ordered before the company’s financial wobble. “They were on order while all this mess was taking place, so it’s been a bit stressful for all involved,” he said.

“But they’re all literally coming off the boats. We have two more to build, and 11 under order when they went into receivership, but the good news is everyone is now where they should be.”

Ross also praised Bavaria’s German administrators and management for rescuing the business. "They could have just packed everything up and kept the cash," he said. "But they did the right thing and ensured everyone got their boats, which is good”.

He said Bavara’s turnaround was also a positive sign for a return to Australia’s boat show circuit after a subdued Sydney International Boat Show with no new product to woo buyers.

“Last year ... 10 percent of the total show was us,” Ross said. “We weren’t able to do that this year with most of our boats missing, but we’re back on track now.”

Bavaria Australia sells mainly sailboats here, although Ross said the German brand’s powerboats had also started attracting more buyer interest over the last two years.