Norton sold to Indian bike firm TVS

After Jaguar, Land Rover, Royal Enfield and BSA you can add another name to the list of iconic British brands owned by Indian companies as Norton has been sold to TVS.

Norton’s administrators, BDO, confirmed yesterday that it has agreed the sale of ‘certain assets’ of Norton Motorcycle Holdings and Norton Motorcycles to an indirect subsidiary of TVS Motor Company.

That subsidiary is believed to be a UK company specially set up to make the deal, Project 303 Bidco Limited, which was incorporated on 2nd April this year and counts Kunnath Narayanan Radhakrishan among its directors. He’s also the President and CEO of TVS Motor Company.

It’s important to point out that the fact that TVS has bought only certain assets of Norton Motorcycles and Norton Motorcycle Holdings, two of the four Stuart Garner-run businesses that went into administration at the end of January this year. The others are Donington Hall Estates and the Priest House Hotel.

Picking out particular assets means TVS hasn’t snapped-up the whole business as a going concern, complete with its debts and liabilities. Instead it’s been able to cherry-pick elements that it needs.

TVS sold 2.82 million bikes in India alone last year. In comparison, Hero (the best-selling firm) sold 6.78 million and Honda India (2nd) did 4.9 million. The whole Indian bike market for the year accounted for 19.3 million bike sales.

Above: V4 superbike is the jewel in Norton’s crown

However, the deal looks like good news for Norton’s creditors. TVS has paid £16 million for Norton – a figure that exceeds the amount owed to creditors as listed in BDO’s official reports.

According to that paperwork, Norton Motorcycles owed £4.04 million to Metro Bank, its only secured creditor, and a further £7.2 million to unsecured creditors. Norton Motorcycle Holdings is a holding company, owner of Norton Motorcycles, Norton Racing and Donington Hall Estates Limited, and at the moment it’s still not clear which of its assets TVS has purchased.

In total, Norton-related businesses including Norton Motorcycles and Donington Hall Estates owe creditors some £14 million, so TVS’s buyout more than covers the debt and means creditors are likely to see their money back. BDO’s Lee Causer said: “In challenging circumstances, we have been able to secure the future of the Norton brand. We are delighted that the sale to TVS Motor Company will protect jobs and provide a highly beneficial outcome to creditors.”

Above: Norton will remain at its current base for the next six months 

Although we don’t know precisely which assets TVS has bought, the administrators’ proposals show that Norton Motorcycles’ assets were valued at around £12 million. Of them the largest part was the intellectual property, which had a book value (from Norton’s last official accounts) of £5,237,572. On top of that, Norton’s chattels were valued at £3,473,662 and its receivables (the amounts owed to the business) were put at around £1.1 million.

Norton Motorcycle Holdings’ assets were valued at another £6.3 million in the firm’s last accounts.

The implication is that TVS has bought the lion’s share of Norton’s assets as well as all the intellectual property. However, it doesn’t appear to have bought the company’s Donington Hall base, as BDO’s official statement on the buyout says it has only acquired a licence to occupy the existing manufacturing premises for the next six months.

Although Norton only has 58 staff on its books, their contracts are being transferred over to the new owner.

Above: BMW-based Apache RR 310 is currently TVS’s biggest-capacity bike

The deal brings up an obvious question as to how Norton fits in with TVS’s business model and current model range.

At the moment the biggest part of TVS Motor Company’s business is small-capacity bikes and scooters. It also works with BMW, building the firm’s G310 single-cylinder models. The G310 is also the basis of TVS’s largest current bike, the Apache RR 310 sports bike, which is effectively a full-faired version of the BMW G310R. Overall, TVS is India’s third-largest bike firm after Hero MotoCorp and Honda Motorcycle & Scooter India. However, most of those scales are scooters and mopeds. On motorcycles alone, it trails behind Bajaj, too.

TVS also makes three-wheeled commercial vehicles and one electric scooter, the iQube, and soon plans to launch its first cruiser-style bike, the Zeppelin, onto the market.

In buying Norton, the firm gets a toehold in a new market sector and instantly accesses both an evocative brand name and the engineering behind large-capacity models including the old Commando-based 961 range, the 1200cc V4 superbike and the forthcoming 650cc parallel twin Atlas and Superlight machines. In doing so, it’s gained the tools to create bikes that rival those of fellow Indian company Royal Enfield, which dominates the country’s large-capacity motorcycle market.

Above: Atlas Nomad (above) is one of Norton’s key upcoming models

What does TVS have planned for Norton? That’s the £16 million question, and at the moment the closest thing we have to an answer is the statement from its Joint Managing Director, Sudarshan Venu, who said: “This is a momentous time for us at TVS Motor Company.  Norton is an iconic British brand celebrated across the world.  Norton with its exciting range of products presents us with an immense opportunity to cater to the aspiration of discerning motorcycle customers around the world.  We will extend our full support to Norton to regain its rightful glory.”

That sounds pretty positive, and certainly suggests that TVS wants to be proactive in getting Norton on its feet. That’s more than happened with fellow British legend BSA, which was sold to Indian bike and car maker Mahindra for £3.4 million in 2016 and seems to have disappeared from sight since then, with Mahindra instead focusing on reviving the Jawa brand name.

However, TVS will still have plenty of work to do. While Norton’s 961 models including the Dominator and Commando are Euro-4 approved, it’s not clear how easily they’ll achieve the Euro-5 emissions standards due to come into force next year. Meanwhile, the 1200cc V4 RR and SS superbikes have yet to gain international emissions certification and there’s still a lot of development needed on the 650cc twin-cylinder Atlas and Superlight machines before they’re ready to go to customers.

It’s also worth noting that licences to manufacture Norton’s new 650 twin and its existing 961 twin were both sold before the firm went under, to China’s Zongshen and Jinlang respectively, so depending on the details of those agreements, TVS may not be the only firm able to make those motors.