Insolvency: Prophete & Cycle Union - sale due to hacker attack

The bicycle manufacturer Prophete has gone bankrupt. The company, originally founded in 1908 and based in Rheda-Wiedenbrück, sells bicycles, pedelecs and accessories in the low and medium price segment via DIY stores or discounters such as Aldi and Lidl. Since the closure of production in Rheda-Wiedenbrück in 2011, Prophete bikes have been manufactured exclusively in Romania and India.

>> Good & cheap? How much does a good mountain bike cost? >>

>> What should I spend on a good e-mountainbike? >>

Also affected by the bankruptcy is the Prophete subsidiary Cycle Union, based in Oldenburg, which still manufactures higher-priced bicycles for specialist retailers under the Rabeneick, e-bike manufaktur, vsf fahrradmanufaktur and Kreidler brands.

Hacker attack plunges Prophete into insolvency

The insolvency application is apparently a consequence of unfortunate events in the already highly competitive low-cost segment. The provisional Insolvency administrator Michael Sack told the F.A.Z.The unexpectedly weak 2021/2022 financial year was compounded by a hacker attack in November, which paralysed the company for several weeks. "The resulting losses were no longer manageable for the company," says Sack, summarising the events.

Sales process started for Prophete Group

Meanwhile, the sales process is underway. Several parties have already expressed interest in the bicycle and e-bike manufacturer. "I am confident that we will succeed in finding a sustainable investor solution for Prophete," says insolvency administrator Sack, who is giving himself until the end of February 2023 to do so. The insolvency substitute benefits, which secure wages and salaries for around 400 employees at Prophete and Cycle Union, will continue until then. It remains to be seen what will happen after that.

Sale of brands, investments & real estate

The business operations of the insolvent operating companies Prophete (Rheda-Wiedenbrück) and Cycle Union (Oldenburg) with the brands Prophete, Rabeneick, e-bike manufaktur, vsf fahrradmanufaktur and Kreidler are up for sale. The business premises at the Rheda-Wiedenbrück and Oldenburg sites are also to be sold.

The 47.5 per cent stake in the Romanian bicycle manufacturer Eurosport DHS, which was not affected by the insolvency, will also be sold. The company, which is owned by Chinese investors, has been manufacturing bicycles for the European market here since the 1990s - including under this name since Prophete joined the company in 2006.