Isaac Larian, the Chief Executive Officer of MGA Entertainment, Inc., the largest shareholder of Zapf Creation AG, informed the company that he is prepared to purchase the company's outstanding indebtedness to banks for an adequate price. Mr Larian submitted an offer to the syndicate of banks whose facility expired on 30 June 2007. In a second step the Zapf Creation group shall be refinanced long-term by banks used to working with MGA.

The Management Board of the company continues to negotiate with all parties involved to secure the long-term financing of the company. To avoid insolvency proceedings, a solution will have to be found shortly.