Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/128324
Bombardier (Can-Am motorcycle shown below) last awned a m0torcycle company in 1987. It ~~ one the passible buyers of Apnha, as I~ Piaggio Group, the company that IS looking to relaunch the Gilera brand (prototype shown right), 0:' Group) laid offunder the Italian system of casso I1tegrazione ordinaria, a government-funded scheme which sees a company's payroll essentially guaranteed by the state as a short -terrn bailout to tide an essentially healthy finn over temporary liquidity problems. In Aptilia's case, this was scheduled to end on May 7, and com bined with the poss ible default on payment of the bond interest two days earlier, it presents the very real threat of the company's going under - not helped by the fact that the shutdown has taken place right at the onset of the company's peak se iling season, with 68 percent of sales In the crucial Italian home market taking place between April and July. Aprilia'svolume - in a market that has grown by 14 percent in the first three months of the year - has already plummeted by 8.3 percent, with its best-selling current model , the Atlantic 200 scooter, languishing in 15th place in the Italian twowheeler hit parade. This has come on the back of a roIler-coaster ride for the company's sales in Italy where Aprilia registrations , of powered two-wheelers over SOcc went up from 46,495 units in 1999 to 60,346 m 2000, before slumping to 39,215 in 200 I and then 36,379 in 2002 in the wake of the overall collapse in the market, which also caused Piaggioand other scooter specialistsso many problems . But in 2003, Apriliasales increased by 26.3 percent to 45,962 units, representing an 11.3 percent market share, up from 9.3 percent the year before. Howe,;,r, the most significant factor in the company s cash cns rs has been the collapse of the SOcc market, where Apr ilia's volume declined fro m 125,182 units sold in 1999 to just 40,363 in 2003. That 's a lot of missing revenue. The major part of Aptilia's exposure is understood to be to a group of seven banks, headed by SanPaolo Imi and the Banca Nazionale del Lavoro/Bnl - one of which is apparently owed no less than Euro 78 million by the company - but also including Banca Intesa, wh ich, coincidental ly is currently , underwriting MVAgusta's rocky road to sur vival under administration , as well as the ones that took the biggest hit last year when the heavily insolvent Piaggio Group was restructured under the control of Italian tycoon Roberto Colannino . In what, post-Parmalat, has become an exceptionally nervous Italian business community, the seven banks are understood to have refused a request from Beggio for a further immediate loan of Euro 10 million [$12.2 million in order to payoff ] suppliers and restart the flow of components, so as to allow production to recom mence. Aprilia, remember, manufactures almost no parts of a motorcycle itself, but commissions components to its own design from suppliers around the world, which it then assembles into complete motorcycles on a just-in-time basis. This places it at the exceptional mercy of its suppliers and means that, when even one of them turns offthe taps because it hasn't been paid, the company is caught between a rock and a hard place, and it doesn't have either a sufficient stock of parts to sustain production nor the in-house manufacturing capacityto find a way around that. This is what has now happened, with reliable sources confinning that debts to suppliers total more than Euro 50 millio [$6 1 miln lion], with Austrian engine supplier Rotax, especially, not paid for two years by Aprilia. Since Rotax manufactures allAprilia's 10000c V-twin engines used in its RSVI000, Tuono, Caponord, Falco, Tuono and Futura models, as well as many of its small-capacity power units, any decision by the Canad ian-owned Austrian company to demand a full settle ment of outstanding debts before restarting supplies would require a very big check. This is understood to be the main reason why the seven banks refused Aprilia's request for a bigger loan - instead of Euro 10 million being needed in cash to restart production, insiders insist it would take at least Euro 30 million [over $36 .5 million] to do the job, and thus restore a positive cash flow, which might. In time , allow the company to trade its way out of its current difficuities. Aprilia's already fraught financial situation has been exacerbated by Beggio's acquisition in 2000 - at the third time of asking - of Moto Guzzi, which he purchased from its forme r owner, the late Alejandro de Tomaso, and his American backers Trident Rowan, with a bid of around Euro 70 million Oust over $85 million] to beat out Ducati 's owner TPG, whose valuation of the moribund company was quite a bit lower. Since then, Aprilia is re u e