MIFA’s Future Remains Uncertain
SANGERHAUSEN, Germany – The insolvency procedure of bike producer MIFA led to a struggle between major shareholder Carsten Maschmeyer, supervisory board member Utz Claassen and board member & CEO Thomas Mayer on one side and the creditors (bond owners and banks) together with the administrator Lucas F. Flöther on the other side.
In an interview by German business newspaper ‘Handelsblatt’ with major shareholder Carsten Maschmeyer earlier this week, a new investor popped up. The German private equity investor Deutsche Balaton AG is willing to invest about €7.5 million in MIFA via an option bond. Besides this investment, Deutsche Balaton intends to find another €7.5 million from MIFA shareholders and further investors in order to start the restructuring of MIFA.
Administrator Lucas Flöther from Flöther & Wissing confirmed that he spoke to several possible new investors but did not want to comment on it or mention any names. It appears that Flöther prefers to talk behind closed doors and only to communicate clear facts and not ongoing negotiations.
Maschmeyer blames “self-appointed saviours”
“I got the impression that MIFA became a self-service shop,” said Maschmeyer in the interview. “Countless consultants, trouble-shooters and insolvency experts seem to be interested in making a profit out of the funeral of this traditional company – and this all at the expense of innocent employees.”
Asked by Handelsblatt if Maschmeyer intends to stay involved in MIFA and perhaps invest again in the company, the major shareholder stated: “If it really helps I am willing to agree on the so called capital cut to the disadvantage of the current shareholders and approve further investments in the company.” Maschmeyer also stated that he has ‘mentally completely written off his €8 million investment (= 20.2% stake) in MIFA.
Despite his diminished role, MIFA’s CEO Thomas Mayer is still positive about the future: “With an eye on orders for season 2015 we received positive signals from important larger customers.” Most remarkable is restructuring expert Utz Claassen’s position. In June 2014 he joined MIFA’s Supervisory Board but he isn’t officially quoted anywhere in the media. Perhaps he leaves this up to Mayer. Once both worked together at Solar Millenium AG which filed for insolvency on 14 December 2011 and the insolvency proceedings were opened on 1 March 2012.
According a report this week in the ‘Mitteldeutsche Zeitung’ it is unlikely that insolvency administrator Lucas F. Flöther is intimidated by the MIFA Supervisory Board. His office Flöther & Wissing is one of the largest in Eastern Germany and Flöther’s prime goal is “to save the company as well as many jobs as possible.” And that’s exactly what Maschmeyer wants as well.
Problems for local district
Moreover, MIFA’s insolvency has already had a direct impact on the local authorities. Due to missing rental payments for the MIFA grounds, the district announced a budget freeze starting officially on 10 October. When MIFA’s financial problems were revealed in April this year the state of Saxony-Anhalt bought the factory grounds via a sale-and-lease-back deal and paid €5.7 million. Both parties agreed that MIFA had to pay a quarterly rental fee of approximately €160,000.
According to local newspaper Mitteldeutsche Zeitung, the first term of more than €110,000 was paid in May. The second term which was scheduled for the end of September wasn’t settled. Local district counsellor Angelika Klein said to Mitteldeutsche Zeitung that without the budget freeze “we couldn’t be sure if we would survive until Christmas.”