As Production in New Factory Starts MIFA Filed for Insolvency
SANGERHAUSEN, Germany – After fiercely denying it just three weeks ago MIFA is nevertheless in serious financial trouble. The German bike maker that just started production in its new facility has filed for insolvency on January 4.
On December 18 during a telephone conversation with Bike Europe MIFA owner and CEO Heinrich von Nathusius denied that there were financial difficulties, as was reported by a local newspaper called ‘Volksstimme‘. He said, “We have paid the final amount of just over 2 million euro last week as part of the finalization of the new factory.”
Von Nathusius mentioned further that MIFA’s 2017 order book is filled with orders worth up to 42 million euro and that the company’s three banks, which have been involved in the re-start of the German bike maker, have their credit lines open.
With the January 4 filing for insolvency Heinrich von Nathusius stepped down as MIFA CEO.
Business family Von Nathusius
According to the responsible District Court Halle (Saale) MIFA filed for ‘insolvency in self-administration’. Reference number of this insolvency is 59 IN 4/17. This comes after earlier financial troubles leading to an insolvency which took place in September 2014. Three months later Germany’s prestigious business family Von Nathusius stepped in and continued the company under the name MIFA-Bike Gesellschaft mbH.
The Von Nathusius family is the sole shareholder of German auto parts supplier IFA Rotorion-Holding GmbH in Haldensleben. The group of companies employs a staff of approximately 2,500 worldwide in three locations Saxony-Anhalt, USA and China. For generations the Von Nathusius family has been part of the long history of Germany’s industrialization. In 1992, Heinrich von Nathusius acquired IFA-Rotorion and transformed it into the world’s biggest producer of drive shafts for cars.
In November 2014 Heinrich von Nathusius (73) was asked to takeover MIFA and save the country’s volume-wise biggest bicycle factory from closure. He quickly developed a new strategy and planned the construction of a new factory – all based on his long time experience in the car industry.
Insolvency in self-administration
‘Insolvency in self-administration’ is comparable with US Chapter 11 and provides the company creditor protection for a three months period. During this time production continues at MIFA while the wages of the about 550 people working at MIFA are being paid by the German government employment agency. During this period the MIFA-Bike Gesellschaft mbH management is to get the company back on track.
It is likely that Felix von Nathusius (42) will be involved in this management. He is the son of Heinrich von Nathusius and since July 2014 CEO of the IFA Rotorion-Group. He took over this leadership from his father. Felix von Nathusius is trained at the most prestigious financial institutes as well as at a technical university in Oxford, Paris, Madrid and Berlin and has a background in the automotive industry at parts suppliers.
Felix von Nathusius will surely want to protect the multi-million investment of his family in MIFA. On December 21 the first bicycles left this new factory. The shift from the old facility in downtown Sangerhausen to the new, in the city outskirts and close to the highway located facility was supported by a 2.85 million euro cash injection of the State government of Saxonia-Anhalt. Moreover this State, that has a high unemployment rate, supported MIFA also at the end of 2014 as well as in early 2016.
What has caused the current MIFA insolvency has not been made public. But media publications in Germany state that the banks wanted to cut their credit lines as they didn’t receive a new MIFA re-development report. At the end of 2016 it was said that Heinrich von Nathusius rejected to deliver this report.
What likely would have been in this report is that MIFA is aiming to turn from making supermarket bikes toward more expensive premium bicycles and e-bikes sold through dealers. For that the company acquired the Grace and Steppenwolf brands. In an interview that Bike Europe had with Heinrich von Nathusius last May he said, “To grow our IBD business and to cover more price categories next to Steppenwolf and Grace we will introduce the entry-level brand Vaun this summer which will include bicycles in all categories.”
At a this afternoon held press conference more details were made public on the reasons for the insolvency. Disappointing sales in the past few months that were down on the planned numbers has caused liquidity problems at MIFA. This stopped the company’s bank credits.
According to the District Court Halle (Saale) lawyer Dr. Lucas Flöther is now responsible as MIFA administrator. Flöther knows the company best. He brought the MIFA out of its last 2014 insolvency as the responsible administrator.
Next to administrator Flöther this afternoon a restructuring managing director has been appointed. His name is Joachim Voigt-Salus. He will be leading MIFA-Bike the next three months and maybe longer. He is a lawyer specialized in restructuring companies.
One of the firms that could be interested in continuing or re-starting MIFA is Hero Cycles. India’s biggest bike maker has shown earlier an interest in the German facility and says to still be in search of a production facility in Europe.