Helena Frye
Bavaria Yachts, one of the world's largest production boatbuilders, filed for bankruptcy in 2018 after US investors Oaktree Capital Management and Anchorage Advisors withdrew their support. The German shipyard had been bought by American investment firms Bain Capital in 2007, before the financial crisis of 2008. The company's creditors, Oaktree and Anchorage, waived a substantial majority of their loans and became majority shareholders, investing 'significant resource'. However, in 2018, the investors pulled out, sending shockwaves through the industry.
| Characteristics | Values |
|---|---|
| Reason for investors pulling out | Insolvency |
| Company | Bavaria Yachts |
| Investor companies | Oaktree Capital Management, Anchorage Advisors |
| Date | April 2018 |
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What You'll Learn
The sacking of Bavaria's CEO, Lutz Henkel
Bavaria Yachts, one of the world's largest production boatbuilders, fell into financial difficulty when US investors Oaktree Capital Management and Anchorage Advisors pulled out of the company. This came as a shock to the industry, as the investors' decision came just a day after the sacking of Bavaria's CEO, Lutz Henkel.
The company had been bought by Bain Capital in 2007 for €1.3bn, but was handed over two years later to debt investors Oaktree and Anchorage in a huge debt-for-equity transaction. As part of this, the two specialists wrote off 90% of Bavaria's €960m debts. Oaktree and Anchorage then became creditors post-financial crisis in 2008, waiving a substantial majority of their loans and becoming majority shareholders.
The sacking of Henkel and the subsequent pulling out of investors came as a surprise to dealers and suppliers, with the news taking them completely unawares. The insolvency is said to have affected the manufacturing arm of the company building Bavaria monohulls, with the catamaran division remaining unaffected.
The company's American team had also recently ended its partnership with Bavaria Yachts USA, which came as a surprise to the team, who had been preparing for the annual North American boat show.
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Bavaria's financial trouble
Bavaria Yachts, one of the world's largest production boatbuilders, found itself in financial trouble in 2018 when US investors Oaktree Capital Management and Anchorage Advisors decided to withdraw their support.
The investors pulled out a day after the sacking of Bavaria’s CEO, Lutz Henkel. Oaktree and Anchorage had become creditors to the company after the financial crisis in 2008, and had waived a substantial majority of their loans to become majority shareholders. However, the company's decision to expand into larger yachts proved to be costly. In 2016, the company announced the end of its partnership with Bavaria Yachts USA, citing the financial cost of having boats to American standards as a significant factor.
The insolvency affected the manufacturing arm of the company building Bavaria monohulls, but the catamaran division, Bavaria Catamarans, was not said to be affected. The investors guaranteed three months of operation until the yard closed for its annual summer holidays.
Despite the financial troubles, the catamaran division of Bavaria Yachts remains strong, and the company has sought to rebuild with the help of new investors.
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Bavaria's debt-for-equity transaction
In 2007, Bavaria Yachts was bought by Bain Capital for €1.3bn. Two years later, the company was handed over to debt investors Oaktree Capital Management and Anchorage Advisors in a huge debt-for-equity transaction. Oaktree and Anchorage wrote off 90% of Bavaria's €960m debts and became majority shareholders.
In 2018, Bavaria Yachts filed for bankruptcy after its US investors decided to withdraw support for the company. The investors pulled out a day after the sacking of Bavaria's CEO, Lutz Henkel. The insolvency affected the manufacturing arm of the company building Bavaria monohulls, but the catamaran division was not affected.
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Bavaria's insolvency
In April 2018, German builder Bavaria Yachtbau declared insolvency after US investors Oaktree Capital Management and Anchorage Advisors pulled out. The investors' decision came a day after the sacking of Bavaria's CEO, Lutz Henkel.
The company, one of the world's largest production boatbuilders, had been bought by Bain Capital in 2007 for €1.3bn. Two years later, the company was handed over to debt investors Oaktree and Anchorage in a huge debt-for-equity transaction in which 90% of Bavaria's €960m debts were written off.
Oaktree and Anchorage became creditors in 2008, post-financial crisis, and waived a substantial majority of their loans to become majority shareholders.
Despite the insolvency, Bavaria's catamaran division was said to be going strong. The investors gave Bavaria a 'soft landing', guaranteeing three months of operation until the yard closed for its annual summer holidays.
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Bavaria Yachts USA's termination of partnership
In April 2018, Bavaria Yachts filed for bankruptcy after US investors Oaktree Capital Management and Anchorage Advisors withdrew their support for the company. The investors pulled out a day after the sacking of Bavaria's CEO, Lutz Henkel.
The German shipyard had been in financial trouble for some time. In 2007, the company was bought by Bain Capital for €1.3bn. Two years later, it was handed over to debt investors Oaktree and Anchorage in a huge debt-for-equity transaction. As part of the restructuring, Oaktree and Anchorage waived a substantial majority of their loans and became majority shareholders, investing 'significant resources'.
Despite this, the company continued to struggle. In 2018, it was announced that the partnership with Bavaria Yachts USA had come to an end. In a statement, the American team expressed regret at the termination of the collaboration and the method used. They had received a letter of termination with immediate effect, despite having been preparing for the largest and most expensive boat show on the market.
The insolvency affected the manufacturing arm of the company building Bavaria monohulls. However, the catamaran division, Bavaria Catamarans (formerly Nautitech), was not said to be affected.
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Frequently asked questions
American investors pulled out of Bavaria Yachts because the company was in financial trouble.
The company filed for bankruptcy.
Oaktree Capital Management and Anchorage Advisors.
Yes, Bain Capital sold the company to Oaktree and Anchorage in 2009.
