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European Bank signs loan agreement for Czech motorbike company
The European Bank for Reconstruction and Development today signed an ECU 8.7 million loan agreement with CZ-Cagiva, a joint venture between CZ Holding, a Czech conglomerate and Cagiva Motorcycles SpA, the largest European motorcycle manufacturer.
Ron Freeman, First Vice President for Merchant Banking, said "Financing such a project will mean that famous brand names like Ducati and MV Agusta will for the first time be manufactured in the Czech Republic. We fully expect Cagiva's lead to bring in other component manufacturers, creating a multiplier effect for the Czech motorcycle industry."
He continued "CZ-Cagiva will become a cornerstone for the Italian company as it represents a base to increase Cagiva's capacity for motorcycle exports to the world market at a very favourable cost; in turn this will result in important employment creation and foreign exchange earnings for the Czech motorcycle industry.
The loan will assist in restructuring an existing motorcycles, components and engines manufacturing plant in Strakonice, Czech Republic. The investment programme includes the acquisition and installation of new equipment and the provision of working capital. By 1996, the facility is expected to be producing 40,000 motorcycles per annum.
Cagiva focuses on top-of-the-range high performance models for motorcycle enthusiasts. The Group's competitive edge derives from the outstanding research capabilities of the Ducati and Cagiva R&D centres and from its reputation gained from winning the Superbike world championship for the last three years.
SIMEST, the Italian agency, which supports joint-ventures in developing countries, is expected to be a partner in the project.
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