MIFA Mitteldeutsche Fahrradwerke : Confirmation of net loss for 2013 according to preliminary figures, accumulated loss of about EUR 28 million due to incorrect accounting also in previous financial years May 15, 2014

- Expected net loss of around EUR 15 million in the 2013 financial year according to HGB (Handelsgesetzbuch - German Commercial Code) figures
- Incorrect accounting of inventories in previous financial years
- Successful company reorganization possible according to assessment by MIFA's Management Board and HERO

Sangerhausen, 15 May 2014 - According to preliminary, unaudited HGB (German Commercial Code) figures, MIFA Mitteldeutsche Fahrradwerke AG ("MIFA", German security identification number A0B95Y, ISIN: DE000A0B95Y8) has generated a net loss of about EUR 15 million in 2013 financial year as reported in the ad hoc release dated March 20, 2014. Revenues at the level of the individual annual financial statements were at around EUR 108 million in the 2013 financial year. In the face of current knowledge, the Management Board of MIFA no longer expects a balanced result for the first quarter of 2014.

In the course of investigations by the Management Board and Supervisory Board of MIFA, it has been detected that also the previous years' financial statements contain material misstatements. These misstatements relate to the inventories of raw materials, consumables and supplies as well as finished goods. Recent findings show a cumulative inventory difference in the amount of approximately EUR 19 million, which originate from the financial statement 2012 and previous years. Taking into account the net loss for the financial year 2013, this will prospectively lead to an accumulated loss of approximately EUR 28 million as of December 31, 2013.

Also after the accumulated loss from past financial years is known, the Indian bike manufacturer Hero Cycles Ltd. ("HERO") sees substantial potential in a strategic partnership with MIFA. HERO plans to invest EUR 15 million of equity into MIFA as part of capital increases in cash. However, HERO views significant financial contributions of the relevant financing partners of MIFA as precondition for its investment.

The Management Board of MIFA is currently preparing close consultations with the relevant financing partners. The restructuring concept shall also be discussed with the corporate bond creditors. An invitation to a creditors' meeting is expected to be released in the coming weeks.

The consultancy firm Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft is preparing a restructuring opinion, based on which further action on the future direction of business operations shall be taken. The restructuring opinion is expected for June.