Aprilia Motorcycles Finds Funding, Will Retain Moto Guzzi

New lines of credit end Aprilia Motorcycle's financial crisis, enabling it to resume production and retain its subsidiary brands, Moto Guzzi and Laverda. By Art Friedman.

Aprilia has announced that it has obtained credit that will enable it to pay its outstanding debts and resume production of its motorcycles and scooters. The release below also indicates that it will retain its subsidiary brands, Moto Guzzi and Laverda. Because Ducati had announced its interest in purchasing Moto Guzzi, there was speculation that Aprilia might sell that brand to repay its debt.

The company has secured credit for 30 million Euros (at least we think that's what the press release below means) and has renewed an additional 150 million Euros of credit. The company says that the funding agreement includes plans for "reorganization initiatives designed to gain cost savings and operating efficiencies," with little specifics about what that means. The release also mentions "continued growth" of Moto Guzzi, Aprilia's only brand that makes motorcycle models in the cruiser category.

With the motorcycle market continuing to grow and Aprilia's profile rising within the motorcycle world, it was surprising that the company managed to get into a financial jam. However, if it can remedy the issues that got it into financial trouble, there is every reason to expect a rosy future for the company, at least as long as the motorcycle market worldwide continues to expand.

The release from the company's U.S. arm follows.

_Aprilia Announces New Round of Business Funding

U.S. market record-setting growth contributes to high demand for Italian manufacturer's award-winning motorcycles and scooters

Woodstock, GA (May 6, 2004) — Aprilia SpA, the Noale, Italy based manufacturer of award-winning motorcycles and scooters, today announced new credit lines for $30 million Euros as well as renewal of existing lines, for a total global line of credit of $180 million Euros. The financing agreement was reached with the assistance of a consortium of financial institutions, including Interbanca and Caretti & Associati. This new round of funding allows Aprilia to resume full production and satisfy high market demand as the main riding season gets underway in most parts of the world.

Demand has been especially strong in Aprilia's growing U.S. market. Despite being a relative newcomer in the market—the company established its U.S. subsidiary in 1999—American consumers have embraced the Italian manufacturer's award-winning line of scooters and motorcycles. Aprilia, which offers more scooter choices than any other manufacturer in the U.S. market, just posted its best April sales month ever, increasing total unit sales 30.6% over April, 2003. In addition to strong scooter sales, Aprilia's high-performance super sport bikes and adventure touring bikes continue to win awards for their thrilling combination of ride characteristics, technology and style.

This new round of funding allows Aprilia to concentrate on an industrial plan and continue its growth by leveraging its extraordinary know-how and brand popularity. The industrial plan will include reorganization initiatives designed to gain cost savings and operating efficiencies. In addition, Aprilia will continue to proactively discuss business investment opportunities with financial and/or industrial investors to ensure that necessary resources are in place for continued growth of the company's prestigious Aprilia, Moto Guzzi and Laverda brands.

About Aprilia USA

Aprilia is Europe's second largest motorcycle and scooter manufacturer. Founded in 1968 and headquartered in Noale, Italy—just outside Venice—the company is privately owned and has eight subsidiaries in key world markets. Aprilia World Service USA, Inc. is the company's U.S. importer and distributor. The subsidiary is headquartered in Woodstock, Georgia, just a few miles north of metro Atlanta and at the entrance to some of the best riding roads in America. Aprilia USA's 128 U.S. dealerships offer a full line of performance motorcycles and scooters, as well as electric bicycles. For information on Aprilias complete model line, visit www.apriliausa.com._

Aprilia will retain its Moto Guzzi brand, which includes cruisers like the California Aluminum.