MV Agusta Sale For One Euro Profitable To Proton ?

I think Proton has some explaining to do.

It sold MV Augusta for 1 euro after buying it for RM368 million,now, Harley-Davidson will acquire 100 percent of MV Agusta Group shares for total consideration of approximately 70 million euros (US$109 million).

The sale of MV Agusta for one euro by Proton Holdings Bhd is profitable to the national carmaker as there was no synergy between the Italian motorcycle maker and Proton as a car manufacturer, the Dewan Rakyat was told, Tuesday.

Deputy Finance Minister Datuk Ahmad Husni Hanadzlah said Proton made the decision after taking into account the financial liabilities of Augusta which had 107 million euro (RM545 million) debt.

Proton had acquired 57.75 per cent stake in MV Agusta in December 2004 for 70 million euro (RM367.6 million) but decided to sell the stake a year later to GEVI s.p.a for one euro.

Controversy begins to surround Proton's sale of its 57.75 percent stake in MV Agusta Motors SpA for the token price of Euro 1 and the motorcycle manufacturer's debts.

MV Agusta is a motorcycle manufacturer founded in 1945 near Milan in Cascina Costa, Italy.

Proton rescued Agusta by pumping 70 million euros ($83 million) into the struggling firm, allowing it to pay off its debts.

In late 2005, in the wake of a leadership shakeup, the Malaysian company sold its stake to Italian investment vehicle GEVI SpA for Euro 1, MV Agusta's Euro 107 million in accumulated debts and Euro 32.5 million in working capital requirements.

Meanwhile, Italian Company, Known for Premium, High-Performance Motorcycles Harley-Davidson, Inc. announced the signing of a definitive agreement to purchase the Italian motorcycle maker MV Agusta Group.

Under the agreement, Harley-Davidson will acquire 100 percent of MV Agusta Group shares for total consideration of approximately 70 million euros (US$109 million), which includes the satisfaction of existing bank debt for approximately 45 million euros (US$70 million). In addition, the agreement provides for a contingent payment to Claudio Castiglioni in 2016, if certain financial targets are met. MV Agusta Group is privately held, with the Castiglioni family owning 95 percent of MVAG shares.

The acquisition is expected to close in several weeks, pending the satisfaction of contingencies and receipt of regulatory approvals. Harley-Davidson intends to fund the transaction primarily through euro-denominated debt.