CVS Ferrari in financial trouble

 According to documents made public by the Chamber of Commerce of Piacenza, on February 25, 2010 CVS Ferrari filed for Scioglimento, Procedure Concorsuali, Cancellazione" which literally means, “Dissolution, insolvency procedures and (company) cancellation.”

This means that some form of insolvency procedure has been officially registered due to a poor financial position. This may be due to liabilities exceeding assets and insufficient cash flow making it impossible to keep the business running. This usually happens when shareholders cannot inject any new capital into the company and the total equity (company capital and reserves) have been written off by operational losses. In these cases bankers will not support the company any longer with new credit lines leaving the company with insufficient financial resources to assure regular payments to third parties such as suppliers, employees etc. According to the Italian Corporate Law, in these cases directors are obliged to promptly file for an Insolvency Procedure with the local Public Court.

This follows information that CVS Ferrari has entered into a special terms agreement with creditors for the settlement of their payables, although it is known that even today, the company is unable to pay at least one creditor a promised and agreed amount.

It now looks very likely that the Italian manufacturer of reachstackers, forklifts, side loaders, and straddle carriers faces an uncertain future, not least because (as in the case of other medium-size Italian companies affected by credit crises), the banks are now applying excessive levels of caution regarding the granting of credit.

Allegedly CVS Ferrari has asked for an agreement with creditors, but the company’s management has denied this. Fausto Ferrari, outgoing managing director and chairman of the company who is being be replaced by Giuseppe Ferrari, reportedly told Ship2Shore, “These statements are unreliable and incorrect (but) as of today, we cannot release any further news.”

According to manufacturers in the port handling equipment sector, CVS Ferrari is so desperate to maintain cash flow that it recently tendered for an order for ten reachstackers at such a low price that Fantuzzi-Noell regards it as being unsustainable even in today’s cut throat competitive environment.

In addition, it is now rumoured that CVS Ferrari employees are currently being paid by the Italian government.

(Source: Container Management)