Banks terminate credit facilitys

The credit facility provided to ELSA AG by seven members of an eight bank banking pool have been terminated for February 15, 2002. The credit volume terminated amounts to approximately 28 Million Euro.

One bank and pool member additionally notified the company that the credit facility of 10 Million Euro, provided until March 30, 2002, will not be extended. In case of a repayment of the companies other credits to the pool the bank also expects a loan repayment by February 15, 2002.

Negotiations with the banks about a credit buyout through a third party investor have failed, despite intensive arbitration attempts also of the banking pool leader. Funds for a return of the outstanding credits are presently unavailable. Going concern of the company is therefore unsecured. The management board is evaluating its obligation to initiate insolvency proceedings.