Takeover of Fora Marine: The difficult question of down payments on yachts on order

RM Sailboat under construction

Since the takeover of Fora Marine by the Grand Large group, the shipyard's management has been faced with a major issue: the management of the RM yacht order book with the former owners. Between customer testimonials and response from Stéphan Constance, co-founder of the Grand Large group: a look back at the situation.

Numerous RM yachts on order

Although the financial health of Fora Marine, the builder of the RM yachts, necessitated its receivership and led to the takeover by the Grand Large group, its commercial situation was good. At the time of the sale, the order book showed 28 vessels and 25 customers (some professionals were waiting for several units). " RM's drama is its commercial success! "explains Stéphan Constance, co-founder of the Grand Large group. " This is a new situation, because usually when a company is taken over when it is going badly, there are almost no customers left. When we took over Garcia, there were no customers. "

Customer down payments permanently lost

Although the Grand Large Group took over the yard, it did not take over the debts. " It was impossible to take over client contracts. We said it in court. That would have led us to refile the balance sheet in a few months. " sums up Stéphan Constance. However, down payments made by customers remain within the company. Depending on the progress of the construction of the yacht and the negotiation at the time of the contract, the share paid is up to 50% of the price of the finished boat. They represent a total of 2.1 million euros.

Fora Marine offers a discount on a new boat

For customers engaged with the former management, the yard offers to re-order a new RM under special conditions and with priority over delivery. A commercial discount corresponding to a percentage of the deposit paid is applied to the last published tariff in October 2019. According to some clients, the initial proposal was for 22% of the down payment. It is now 50% of the deposit, says Stephan Constance. " The order has to be reordered because there was no longer any legal connection after the bankruptcy. It is done on the basis of the last tariff in force. The good news is there's no raise. The bad thing is that it can be more expensive than the first signed tariff, depending on the commercial discounts obtained or the initial date of purchase of the boats. But on our side, we cannot assume the inconsequential prices that led to the bankruptcy. It's a dramatic situation with clients who have made large down payments a few days before they file for bankruptcy, but we're still putting 1 million euros on the table: 500,000 euros corresponding to the purchase of production in progress and 500,000 euros in commercial discounts brought in by the Grand Large group. "

Sailing dreams to review

In its takeover press release, Grand Large indicated that it placed particular importance on customer relations. The reception of his proposal seems to be very contrasted. " It goes from "Great. Thanks" to physical threats. Order confirmations are in progress and other situations are humanly more complex. We have set a rule that is intended to be objective, without analysing individual cases, with an effort proportional to the loss encountered ", sums up Stéphan Constance.

For customers who have contacted BoatIndustry, the analysis is drier. The owners' forum has seen many reactions and foreign clients are getting organized with lawyers. " It is a legal practice, but we are being asked to buy back a boat that will end up costing us for some 1.5 times its original price. Personally, I think I'm going to turn it down. It doesn't make sense to buy a boat that expensive. Maybe I'll think about the occasion "says one client.

Another testifies to the end of his dream: " I'll let you imagine all the steps you go through when you put a good part of your savings into a boat that was the culmination of a dream for your family. Alas, our round-the-world tour will not materialize, as the buyers have decided to considerably increase their fares and to recover only part of the down payments made. We won't be able to keep up. "

If the recovery equation is still complex, let's hope that the yachtsmen left behind will really enable Fora Marine to get back on the right tack. It should be remembered that the recovery project sets a target of 14 vessels for August 2020.

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