paragon AG / Insolvency


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paragon AG aims at planned insolvency under self-administration

No agreement among the banks

Delbrück, 05-10-2009. The board of paragon AG will submit an application to
the District Court of Paderborn today to institute insolvency proceedings
due to inability to pay. It is expected that the managing directors of the
German subsidiaries will also apply for the start of insolvency procedures.

The slump in the automotive industry has caused paragon AG to run into
financial trouble.
By starting a cost reduction program including mass layoffs the board of
paragon AG has reacted to the current situation. The board has had
intensive talks with the banks over several months to retain credit lines
and obtain additional liquidity in order to get through the crisis. Despite
multiple promises and a noticeable increase in the number of incoming
orders during the past months an agreement has not been reached so far due
to the heterogeneous interests of the banks involved.

paragon AG will not wait for an agreement any longer. By intentionally
initiating an orderly insolvency the board of paragon AG now forces an
adjustment with its banks and aims at self-administration. At the same time
the company is consolidating its management. Mr Markus Werner (finances)
and Mr Andrew Seidl (recapitalization) were appointed as members of the
board of paragon AG at a board meeting held on 4 October 2009.

The dates for releasing the annual financial statements and for an AGM,
still to be held in 2009, will be announced as soon as possible.

paragon AG is a direct supplier to the automotive industry and is listed on
the Deutsche Börse Prime Standard index in Frankfurt/Main, Germany. The
Company develops, manufactures, and markets innovative solutions in its
Automotive (Sensors/Actuators and Cockpit Systems) and Electronic Solutions
divisions. Its product portfolio includes the world's leading AQS air
quality sensor by far as well as hands-free speaking equipment and
instrumentation systems. In addition to its headquarters in Delbrück, North
Rhine-Westphalia, paragon also operates locations in Suhl, Thuringia; St.
Georgen, Baden-Württemberg; Nuremberg, Bavaria; and Heidenheim,
Baden-Württemberg. In fiscal 2007, the paragon Group generated sales
totaling EUR108.9 million with a workforce of 594 employees.

paragon AG
Schwalbenweg 29
33129 Delbrück
Phone: +49 (0) 52 50 - 97 62-0
Fax: +49 (0) 52 50 - 97 62-60

Head of Corporate Communications
Matthias Hack
Phone: +49 (0) 52 50 - 97 62-141
Fax: +49 (0) 52 50 - 97 62-60

05.10.2009  Financial News transmitted by DGAP

Language:     English
Company:      paragon AG
              Schwalbenweg 29
              33129 Delbrück
Phone:        +49 (0)5250 97 62 - 0
Fax:          +49 (0)5250 97 62 - 60
ISIN:         DE0005558696
WKN:          555869
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, München, Düsseldorf, Hamburg, Stuttgart
End of News                                     DGAP News-Service