Piaggio Aerospace declared insolvency late last week, asking for “extraordinary administration” that would facilitate restructuring, the company confirmed. Under extraordinary administration, the Italian government will appoint a commissar who will work to guarantee business continuity, a spokesman said.
The move comes a year after the financially troubled Italian manufacturer had outlined a five-year turnaround plan that included a £255 million ($342 million) cash injection from Piaggio parent Mubadala Investment Company “to support Piaggio Aerospace’s financial needs,” combined with a “total bank debt repurchase and conversion to equity by the shareholder in support of Piaggio Aerospace’s balance sheet.” By May, company executives were encouraged that the plan was beginning to take root, saying they hoped to double production of the Avanti Evo turboprop twin.
But in a November 22 statement, Piaggio said, “Despite the commitment and hard work of everyone at Piaggio Aerospace, as well as the significant financial contribution made over the years by the shareholder, the key fundamental assumptions of the restructuring plan approved in 2017 have not materialized.” Given current market conditions, “the company is no longer financially sustainable,” it added.
Metalworking union leaders Marco Bentivogli and Alessandro Vella last week appealed to government leaders to “identify all possible solutions” to ensure the long-term viability of the company and protect the 1,200 jobs at stake, they said in a joint statement.