US$ 51 Million Loss for Derby Cycle Corp.

WASHINGTON, DC/USA (April 10) - The Derby Cycle Corporation recently reported a US$ 51 million (Eur 57mn) loss for the year 2000 at the Securities and Exchange Commission in Washington DC. 1999 ended for the Derby Cycle Corp. with a loss of US$ 5 million (Eur 5.6mn). In an interview with Bike Europe which will be published in the April edition (publication date April 28), executive chairman Alan Finden-Crofts presents an explanation for last year's huge loss. He says: 'Derby spent some US$ 8 million (Eur 8.9mn) on consultants from the start in January 1999. Next to that, Derby paid over US$ 20 million (Eur 22mn) for the period of restructuring and the conversion of the headquarter to the USA. Bikeshop.com showed a loss of US$ 18 million (Eur 20mn) when we skipped it. Also in its first year, Derby as a whole lost substantial money on the purchase of supplies because the former management considered pre-finance a gamble anyway, reasoning that exchange rates can also work out to your advantage after a deal has been closed. The next year Derby lacked bank support and lost again. In all, the holding had to plough through an excessive burden of loans to finance all this, before thinking about a profit for the holding.' In the interview with Bike Europe, Derby's Executive Chairman also points out: 'Our suppliers will get their money to the last penny. It's simply inconceivable that we wouldn't pay our creditors and suppliers, most of whom have had long relations with the respective working companies. We'll pay them preferentially.' During the Taipei International Cycle Show which was held in Taiwan last week, Finden-Crofts announced that the Derby Cycle Corporation is able to re-finance its business. The re-finance includes severe cost-cutting and bringing down the interest payments which are estimated at an annual US$ 25 million (Eur 28mn). The proposed measures together with the goodwill in the financial world of Finden-Crofts have found him banks willing to invest in Derby Cycle Corp. Despite the fact that it is his aim to continue Derby Cycle Corp. as a going concern, Finden-Crofts also pointed out that he received an exceptionally good offer for Gazelle on March 30, the proverbial 5 minutes before closing time. During the Taiwan International Cycle Show Finden-Crofts stated: 'There is a due diligence investigation taking place now at Gazelle. The offer for our Dutch operation will be examined by our board of directors, who will decide about the sale. However, I expect that this decision will take at least another month if not longer.' Finden-Crofts made no secret to the fact that he prefers Gazelle to stay within Derby Cycle Corporation. (JO)