Gas Gas chairman releases a letter explaining the Spanish off-road and trials bike manufacturer’s current status.
Spanish off-road motorcycle manufacturer Gas Gas is on the ropes.
Despite producing what is arguably its strongest and most diverse range of off-road motorcycles in its 30-year history, Gas Gas has ceased production in what it hopes will be a temporary delay while it attempts to seek relief from financial woes that have been building for quite some time.
In an open letter to Gas Gas fans, Gas Gas chairman Yariv Gilat wrote the following letter to explain the company’s situation:
Dear colleagues,
This is not a secret that Gas Gas has been facing many challenges during the last years. The company has substantial financial debts from previous years that affected our day to day operations in all aspects, starting with our ability to produce and deliver bikes and spare parts to our loyal customers, through Marketing and R&D. The whole of Gas Gas eco system (suppliers, importers, and dealers) had to face many difficulties due to that situation, and have shown a lot of patience and support. None of this would have worked without the huge support, devotion, and commitment of our employees.
The company, together with its shareholders and some advisors, recommended by the bank, has been working on a debt-restructuring plan for the last few months, which includes new investment by the shareholders to support the company growth.
To date, the banks have delayed their answer and forced us to start some legal actions in order to protect the company and push the process forward. Last Friday, January 17th, 2015, a legal action was placed in court in order to speed up the process.
As part of this process, we had to stop the production during the past days, so there will probably be delays in the deliveries of new bikes and spare parts in the next coming days.
I’m confident that without having a long lasting solution, we will continue to fail in fulfilling our business plan, resulting by not providing you the kind of service we aim for.
This week the process starts moving faster. The company, with its shareholders, are doing their best to close this restructuring agreement as soon as possible in order to immediately resume our production activities.
Gas Gas will promptly report with updates, the moment further developments arise.
Yariv Gilat,
Chairman
The news comes just about one year after Gas Gas announced that the Catalan government had loaned the company 2 million Euros through Avançsa, its own private equity firm, to fund an expansion plan; the company is based in Salt, Girona, which is in Catalunya, an autonomously governed principality in northeastern Spain. The money was intended to assist Gas Gas to acquire new technology to develop its own engines for all of its motorcycle models and to help strengthen the position of Gas Gas and OSSA, which reached an agreement by which Gas Gas assumed OSSA production at its facility in Salt.
According to Gas Gas current annual production volume runs at about 9000 motorcycles per year with 95 percent of those models exported to other countries, some 63 percent to Europe and the rest to countries such as Australia and the United State. In 2014, Gas Gas said that it employed 500 direct and indirect workers.
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