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Norton Motorcycles cannot be rescued

Norton CEO Stuart Garner Norton Motorcycles pay back
"Poster boy" Garner

Norton Motorcycles cannot be rescued as a “going concern” because it owes its creditors a whopping £28,352,089 (more than $A57m).

However, administrators are still negotiating with eight potential buyers.

Joint Administrators’ Proposals report to creditors sent to us by administrators BDO UK says Norton Motorcycles cannot be rescued in its current form.

“Due to the extent of the Company’s known liabilities (including sums owed to Holdings), it is not considered that the Company will be rescued as a going concern,” the report proposes.

In January, Norton Motorcycles went into administration amid claims of pension fund frauds and a £300,000 unpair tax bill.

Almost half the debt is in the 228 pension funds that owes £14m.

UK Pensions regulator is now investigating boss Stuart Garner (pictured above in a UK government export campaign) over his role in the pension scheme to fraudulently fund his company.

The remainder of the debts are to secured creditor Metro Bank (£7m) and the rest to unsecured creditors.

BDO UK’s report to creditors will soon be filed at Companies House and made public.

If anyone is owed money and wants the report, I will email it to them. Contact me via email here.

Buyers sought for Norton Motorcycles

Norton Motorcycles Donington Hall factory crowd
Norton’s Donington Hall factory

BDO UK is also still considering selling the company, claiming it has received “significant interest” from potential buyers:

A deadline for initial offers was set for 21 February 2020, which resulted in 29 formal offers being received for all of the business and assets of the Company. Following the Joint Administrators’ assessment of the offers received, eight offers were progressed to phase two of the sales process, where additional information was being provided to such parties together with site visits and meetings with management, if requested.  A deadline for best and final offers has been set for close of business on 25 March 2020, with a view to concluding a transaction as soon as possible thereafter. Further details of the indicative offers received cannot be provided at this stage, as to do so may prejudice the ongoing sales process. Accordingly, a further update will be provided in the Joint Administrators’ next report to creditors.

So, while we don’t know the identity of the buyers yet, the rumour mill suggests Japanese and Chinese motorcycle companies, John Bloor of Triumph Motorcycles and even motorcycle fan Keanu Reeves whose first bike was a Norton.

Norton Keanu
Keanu on a Norton Commnando

SuperBike Magazine also claims the company’s biggest single investor, Steve Murray, could be interested in buying the company.

They say he invested his entire life savings or about £1 million for 10% equity and loaned the company an extra £500,000.

He was a company director for three months, but chose to be “hands-off”.

Operations mothballed

BDO UK has mothballed Norton’s trading operations and production, but continues to pay employees while it tries to find a buyer:

It was not considered possible to continue production activity whilst in administration due to (i) the increased level of costs that were anticipated to be incurred in continuing production, (ii) difficulties in sourcing raw materials without appropriate lines of credit, which would exacerbate the cash position whilst in administration and (iii) it not being possible to provide warranties to any customer who may acquire a motorcycle from the Company whilst in administration. This strategy has therefore been adopted to provide the best opportunity to source a purchaser for the Company’s business and assets, whilst seeking to minimise the associated holding costs.

The third and final proposal by the administrators is to sell off assets to pay creditors if it cannot find a buyer.

However, assets appear only to amount to enough to pay Metro Bank which is owed £7m.

At least in Australia, importers Brisbane Motorcycles have returned deposits to those who paid for bikes not yet delivered.

  1. I’m just speculating here, but I doubt Steve Murray, when he has all the facts in his hands and is looking at business plans, would be interesting in buying Norton. He’s already £1.5 million down. That’s an expensive lesson. When you compare the sunk cost of £1.5 million against the potential loss of many, many more millions trying to make it a business, it doesn’t make sense. On the one hand, your losses are capped at £1.5m. On the other hand, you have a chance to make a lot of money if you can turn it into a successful business. If you fail at making it a success, you are going to get very badly burned. While there are many much less risky enterprises into which you could invest your millions. So, in the end, I don’t think he’ll take this up. I think he’d be crazy to do so.

    Separating the brand name and logo from the company somehow, and selling it as an IP asset – that’s another thing altogether. It will always be worth something. Could be used to sell high end shoes, nail polish or anything. All sorts of things could be sold under that brand which wouldn’t require massive initial investment into R&D, tooling, staff and marketing. You could just print limited edition series of T-shirts with the brand name on it, and they would sell.

  2. It was revealed today that the right to the 851 engine were sold to the Chinese last year. So in Norton you have a brand name and little else. Also I wonder who owns the rights to that brand?

    1. Hi Paul,
      I read that, but it is not yet confirmed.
      Until there is more than one source for the information, it can’t be verified.
      If it’s true, then maybe Garner was asset-stripping.

      1. Fair point on the confirmation, From the various reports it seems any IP might be buried in who knows what ownership. What a dogs dinner.

  3. Hi,
    I can definitely confirm that John Bloor and his Triumph Motorcycles aren’t involved or interested in any kind of deal or purchase of Norton Motorcycles because I have already emailed Nick Bloor, CEO of Triumph with regards to a possible buy out of Norton, and he made it clear they have no interest at all due to focusing on new upcoming Triumph models therefore the report that John Bloor is an interested party is rubbish. And I have the email from Nick Bloor to prove this if needed.

  4. So now both Norton engines, the 650cc twin and the 900cc twin, are in the hands of Chinese concerns. That leaves everyone else with NOTHING. Since the Chinese are solely interested in profits, it will be in their best interest to get these two engines into production immediately as proprietary powerplants for other makes while developing machines of their own. They won’t let the grass grow under their feet on this.

  5. I’d like to amend an earlier comment: The Chinese concerns have both engines–now what? Chinese makers build every knock-off of current and vintage machines already. Where do these 2 Norton engines fit in their scheme of things? Start a new motorcycle line might be an answer. Metisse Motorcycles of the UK is a low production operation that blends beautiful Rickman-Metisse frames with classic British engines. I’d look for a Chinese concern to build their own knock-off “Metisse” frames and install their Norton engines. This can be easily done without disruption to supply chains already in place for current offerings. Just a thought.

  6. Having been a fan and an ex rider of Norton, Triumph, and Matchless Motorcycles in the past, I am extremely saddened to see the state Norton is in today. BSA and Matchless Motorcycles are history.
    These have been long gone from the scene.

    How is it that Triumph Motorcycles have managed to remain viable, while its fraternal twin – The Norton Motorcycle is in peril ? If I remember correctly, Triumph brought into production Japanese technology by partnering with Kawasaki.

    If the industrial and manufacturing systems and laws in the U.K. do not keep up with worldwide trends,
    just as most of the defunct car and other vehicles did not, motorcycling manufacturing too could become
    a past British Glory.

    For how much longer will the unions continue to blame the business practices of other countries when there is failure to address these core issues in the U.K ? Total reform is needed from the ground up.

    Maybe it is time for all manufacturing to be done overseas using the British Brand names.
    Royal Enfield Motorcycles seems to have achieved this quite well with their range of motorcycles being manufactured in India.

    I was seriously looking to invest in a Norton. Perhaps I should consider the Triumph Bonnaville or even the Triumph Rocket 111 instead. Readily available, with retro looks but modern technology and strong dealerships and service centres to boot !

    1. Motorcycle manufacturing is already extinct in the UK.

      Many more industries will kick the bucket in the UK before the year is out.

      Your comment about the unions is wrong. The unions are very few, they have no power in the UK (apart from the health workers’ and transport workers’ ones) and Norton’s demise was all down to Stuart Garner, not business conditions.

      The business practices of other countries do affect the UK in a major way in a global economy. China is allowed to export to the UK under WTO rules, and there is no way the UK can compete with China’s access to resources and limitless monopoly money credit, its very, very low wage rates and complete absence of health, environment and safety in manufacturing.

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