paragon AG aims at planned insolvency under self-administration

paragon AG / Insolvency 05.10.2009 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- 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 Internet:www.paragon-online.de E-mail: info@paragon-online.de Head of Corporate Communications Matthias Hack Phone: +49 (0) 52 50 - 97 62-141 Fax: +49 (0) 52 50 - 97 62-60 E-mail: matthias.hack@paragon-online.de 05.10.2009 Financial News transmitted by DGAP --------------------------------------------------------------------------- Language: English Company: paragon AG Schwalbenweg 29 33129 Delbrück Deutschland Phone: +49 (0)5250 97 62 - 0 Fax: +49 (0)5250 97 62 - 60 E-mail: investor@paragon-online.de Internet: www.paragon-online.de ISIN: DE0005558696 WKN: 555869 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, München, Düsseldorf, Hamburg, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------