German solar panel manufacturer SolarWorld announced yesterday a capital injection by Qatar, a move which will save the company from bankruptcy as the German sector struggles against Asian competition.
SolarWorld said in a stock exchange statement that it had agreed several measures with its biggest creditors, including the injection by Qatar Solar in return for a 29% stake in the troubled company. SolarWorld founder and chief Frank Asbeck will also end up with a 19.5% share in the restructuring.
“Everyone gets more out of this plan than in the case of failure,” Asbeck said, adding that the company expects to make a profit in 2014 or 2015.
Shareholders will vote on the agreement at an extraordinary shareholder meeting in July.
SolarWorld, which has been struggling to avoid insolvency, says its debt amounts to around EUR930 million at present.
Earlier, the company announced that it would swap about 60% of its debt into new equity, substantially watering down the stake of existing shareholders to around 5% from 100%. After the deal, creditors will hold some 45% in Solarworld.
Solar panels are at the heart of a current trade spat between China and the European Union, which accuses the Chinese of selling its imported solar panels below cost, a process known as ‘dumping’.
German solar companies were once a showcase industry in the global renewable energies sector. But in recent years they have been hit hard by the rise of Asian competitors with massive production capacities.
Prices for solar panels have plunged, resulting in a big loss of revenue for panel makers. Cuts in subsidies for renewable energy have also weighed on the industry.
SolarWorld’s spokesman Milan Nitzschke is president of a European federation, EU ProSun, which has fought for the EU to take action against China, and Brussels has now imposed provisional tariffs.
The investment by Qatar and the involvement of Asbeck, amounting together to a €46mn ($61mn) injection, in effect wipes out much of the company’s debt and inflicts major losses on the company’s current shareholders.
Faced with stiff competition, especially from Chinese solar panel and cell producers, the German solar energy sector, formerly the world leader in the technology, has seen several companies go bankrupt or be bought by foreign companies.
German industry flagship Q-Cells, once the world’s biggest solar-cell maker, filed for insolvency last year before South Korean industrial conglomerate Hanwha Corp snapped up the company.
German engineering giant Siemens said yesterday it would gradually stop its activities in solar energy — where it currently employs some 280 people — by 2014 after failing to find a buyer.
Qatar has a number of stakes in different German companies including BTP Hochtief and auto maker Volkswagen.
Qatar on Monday announced it was selling its 10% stake in German luxury car maker Porsche but would keep its 17% share in that company’s owner VW.
Reported by: Caye Global News, Gulf Times
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