Anxious weeks lie ahead for the employees of what was once Germany's largest sports boat shipyard. As several reliable sources have now confirmed, the management of Bavaria Yachtbau has filed for insolvency.
The need for liquidity to compensate for the accumulating losses was apparently too great recently. The shareholders of Oaktree and Anchorage have therefore decided to no longer take on all liabilities to maintain operations as before.
Its holding company has long been overindebted. The loans amount to several hundred million euros - a mountain of debt that resulted from the once overpriced purchase of the shipyard, but also from many years of losses since then.
According to YACHT information, the main person responsible for the current difficulties, CEO Lutz Henkel, had to resign at the beginning of the week. Initially, it was rumoured that the shipyard and its management spokesperson, who had been employed since the beginning of 2015, had parted "by mutual agreement". In reality, however, it was not an amicable parting. The holes in the balance sheets were too big.
The news came as a surprise to the international water sports industry. After lean years, most shipyards have seen a steady improvement in demand since 2016. Almost all large series yacht manufacturers are plagued by production bottlenecks rather than a lack of orders.
Bavaria had also recently celebrated its own trade fair successes with jubilant reports and announced one "sales record" after another. However, it is now clear that this was merely whistling in the woods. The huge appearance at boot Düsseldorf in January ("Bavaria World") and various new products were also intended to demonstrate strength to the outside world.
The product range was supplemented by the C 45 and C 50. On top of this, Henkel came up trumps with a new flagship, the C 65, which was intended to extend the brand upwards. However, this was merely a new edition of the Salona S 650, which had been without success for some time, and was to be upgraded with a different deck and new interior.
Too much of a good and great thing? There's a lot to be said for that.
Henkel's strategy meant repositioning Bavaria against the better-positioned competition - and sacrificing its actual brand essence of building cruising yachts with an unbeatable price/performance ratio.
There were also recognisable problems internally. Insiders reported serious production and delivery problems last year after the tried and tested assembly line method had been modified. For example, only four units of the C 57 presented a year ago are said to have made it to delivery in one year, despite a significantly higher order backlog. The shipyard also waited too long to renew the fleet and instead tried to sell existing models with large discount campaigns.
In contrast, the takeover of the French catamaran brand Nautitech in 2014, which was driven forward under Henkel's predecessor Constantin von Bülow, is seen as a success. In view of the continuing boom in the catamaran market and the location of the shipyard in La Rochelle on the French Atlantic coast, this prime piece of the company could be excluded from the process because the business is highly profitable. It would also be a good part of the company to sell should no buyer be found for the entire corporate structure.
The local court in Würzburg, where the insolvency petition was filed, is expected to decide on Monday what will happen next. The employees at the Giebelstadt site were informed of this today. There was a glimmer of hope. All employees will continue to work for the time being; their jobs are secure for at least three months. This is because there are enough orders.
If it were possible to ensure the company's continued existence for the time being, losses for owners and dealers who have paid for boats and for suppliers who have made advance payments could be avoided as far as possible.
The original version of this article has been supplemented and revised following the availability of new information. YACHT online will continue to report on the progress of the proceedings on an ongoing basis.
