Youngone Corp sought to secure Scott's operations despite the suspension of global sales by making a significant loan to the company.
Youngone Corp. is a South Korean company known for producing outdoor clothing for major brands such as The North Face and Patagonia. In 2013 it acquired a 20% stake in Scott and in 2015 it acquired 50,1%. An operation costing 86,8 million euros. They recently announced a loan of 160 million euros to ensure the complete stability of Scott's operations in the coming months.
Almost 160 million euros (the equivalent today of the 150 million Swiss francs announced) is the total amount of the loan that Youngone Corp granted to Scott with an interest of 4,6% and maturity December 27, 2024. The Korean company has payment of 100 million Swiss francs has already been granted and the remaining 50 million will take place at the end of the year.
Scott will use the proceeds to support its business operations, and a financial controller appointed by the Korean parent company will oversee the use of the fund. Like many other companies in the bicycle industry, Scott is facing a slowdown in sales compared to the record-breaking post-Covid era.
From data provided by Youngone Corp, it can be seen that Scott had operating profit in the first three quarters of 2023 that was 59,94% lower than the same period last year. A figure in line with those shown by other companies in the cycling sector who see how they have achieved record numbers in the post-covid era and have experienced a notable slowdown in sales compared to that phase in which they broke records in billing and benefits. .
Previously, on September 20, 2022, Youngone Corporation announced that it had filed a request for arbitration with the International Chamber of Commerce (ICC) against Beat Zaugg, founder, CEO and second largest shareholder of Scott, alleging that there had been a violation of the shareholder rights agreement of Beat Zaugg. A procedure that has not yet been concluded.
