Finance
Yacht maker The Italian Sea Group says extra‑budget costs tied to internal bypass scheme
Published by Global Banking & Finance Review®
Posted on March 2, 2026
2 min readLast updated: March 2, 2026
Quick Summary
The Italian Sea Group (TISG) incurred extra-budget costs due to an internal bypass scheme orchestrated by some staff, triggering a cash crunch that delayed wages and forced a €25 million emergency shareholder loan.
Italian Sea Group Deals With Budget Overruns and Emergency Cash Injection
Financial Challenges and Company Response
By Elisa Anzolin
Background of the Budget Overruns
MILAN, March 2 (Reuters) - The Italian Sea Group (TISG), the maker of luxury yachts such as Admiral models, on Monday said its recent cash needs reflected extra‑budget costs it bore after some of its staff set up a system to bypass spending controls on contracts.
Internal Audit and Investigation
The precise number and identity of the people involved, as well as the exact size of the budget overruns, will be determined as part of an internal audit TISG is carrying out with support from consultancy KPMG - with a first report due within six weeks.
Disciplinary Actions
The initial analysis has highlighted the involvement of senior figures within the company, TISG said, adding the board had issued disciplinary warnings to some employees, in some cases suspending them from their duties.
Impact on Finances and Operations
TISG said the out-of-budget costs sustained so far had drained its cash, forcing it to delay wage payments by eight days until it secured a 25 million euro ($29 million) emergency loan from its majority shareholder and CEO Giovanni Costantino.
Ongoing Discussions with Banks
TISG, whose brands include also Perini Navi which built the 56‑metre yacht Bayesian that sank off Sicily in August 2024, said it was talking to banks to address its cash issues with a meeting scheduled in the coming days.
Efforts to Recover Extra Costs
The CEO has also engaged with the owners of the yachts currently under construction in an attempt to recover the extra contract costs, it said in a statement.
Market Reaction and Financial Results
Shares in TISG fell 5% by 1256 GMT.
The shares have halved in value since February 18, when it said it was resorting to an emergency loan to address cash needs following budget overruns on the majority of its contracts.
TISG, reported a 10% drop in revenue in the first nine months of 2025, to 262 million euros, with a 15% decline in core profit.($1 = 0.8533 euros)
(Reporting by Elisa Anzolin; Editing by Valentina Za)
Key Takeaways
- •TISG is investigating budget overruns tied to staff who bypassed spending controls; an internal audit with KPMG is underway, with a report due in six weeks.
- •The company’s cash was drained by these overruns, delaying wage payments and prompting a €25 million emergency loan from its CEO-majority shareholder.
- •TISG’s shares dropped ~5%, and its 9M 2025 revenue and core profit have declined, adding pressure amid legal fallout from the ‘Bayesian’ yacht sinking and recent executive departures.
Frequently Asked Questions about Yacht maker The Italian Sea Group says extra‑budget costs tied to internal bypass scheme
1Why did The Italian Sea Group face extra-budget costs?
Extra-budget costs arose due to a scheme where some staff bypassed spending controls on contracts, leading to budget overruns.
2What actions has TISG taken in response to the budget overruns?
TISG launched an internal audit with KPMG, issued disciplinary warnings and suspensions to involved employees, and sought an emergency loan.
3How has the cash issue affected The Italian Sea Group's operations?
TISG had to delay wage payments by eight days and is actively seeking a solution with banks to address ongoing cash problems.
4How much was the emergency loan secured by TISG?
TISG secured a 25 million euro (about $29 million) emergency loan from its majority shareholder and CEO.
5What has been the impact on TISG's stock and revenue?
Shares in TISG fell 5%, halving in value since mid-February, and the company reported a 10% revenue drop in the first nine months of 2025.
