PRESS RELEASE: MIFA: Reorganisation has reached the home straight

DGAP-News: MIFA Mitteldeutsche Fahrradwerke AG / Key word(s): Agreement MIFA: Reorganisation has reached the home straight

22.08.2014 / 21:16

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MIFA: Reorganisation has reached the home straight

Sangerhausen, 22 August 2014 - As communicated in its ad hoc announcement published today, MIFA Mitteldeutsche Fahrradwerke AG (WKN share: A0B95Y / ISIN share: DE000A0B95Y8, "MIFA") has today taken an important step towards its financial reorganisation. MIFA, One Square Advisory Services GmbH, the Joint Representative of the holders of the 2013/18 bond (WKN bond: A1X25B / ISIN bond: DE000A1X25B5, "MIFA bond"), and OPM Global B.V., a subsidiary of Indian bicycle manufacturer Hero Cycles Ltd. ("HERO"), have today signed a basic agreement relating to the financial reorganisation.

Pursuant to this basic agreement, and as communicated in today's ad hoc announcement, further steps are to be taken for the financial restructuring of the MIFA bond and measures relating to MIFA's equity. Following a reduction of the share capital in a 1:100 ratio ("capital write-down"), a so-called debt for equity swap is to be implemented, entailing adding EUR 15 million of the total nominal amount of the MIFA bond to MIFA's equity.

Dr. Stefan Weniger, Chief Recovery Officer (CRO) at MIFA, regards the basic agreement as a decisive step towards the company's further restoration to financial health: "Following intensive and constructive negotiations, the agreement that has been reached today sends more than a positive signal for all involved. In particular, the reorganisation structure that has now been agreed shows how determined the negotiating partners have been to find a solution which is compatible for all sides, and which forms the basis for MIFA's long-term future. We have now found such a solution. Thus, the reorganisation of MIFA has reached the home straight."

Following the debt for equity swap, MIFA is to receive additional equity of at least EUR 15 million in the form of cash capital increases that are to be mainly subscribed for and underwritten by OPM Global B.V., a subsidiary of HERO. "The considerable strengthening of MIFA's equity base also sends an important signal to our employees and business partners. With HERO, we have gained a strategic investor that believes in MIFA's future, and is also prepared to make a major financial investment in ensuring that our company returns to full health. We are optimistic that, with HERO's investment, not only have we placed an important building block for our financial reorganisation, but we have also found a valuable partner for the future structuring of our operating business," is how Hans-Peter Barth, CEO of MIFA, expressed his pleasure at the agreement that has been reached.

About the company:

MIFA Mitteldeutsche Fahrradwerke AG, headquartered in Sangerhausen (Saxony-Anhalt), is Germany's largest manufacturer of bicycles in terms of sales. The company offers a comprehensive range of bicycle models spanning entry price through to premium end. The components included in bicycle production are sourced from renowned suppliers and assembled at the company's sole production site in Sangerhausen, Germany. Business in this context focuses on product-related order production for major retail chains and OEM (Original Equipment Manufacturer) customers. E-bikes have also been manufactured since 2011. MIFA produces e-bikes for automotive manufacturer smart, manufactures for the Deutsche Post bicycle fleet, and supplies communal lending systems with multi-user vehicles, among other customers. In 2012, MIFA acquired Berlin-based e-bike manufacturer Grace and Bavaria-based cult bicycle forging company Steppenwolf, thereby intensifying its sales activities via specialist dealers. MIFA sells its bicycles predominately on its domestic German market. Further sales markets are located mainly in Western Europe. Both the operating business and administration and logistics are managed at the company's sole production location in Sangerhausen.

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PRESS RELEASE: MIFA: Reorganisation has reached the home straight