Q-Cells Plunges to Record Low Amid Financing Struggle: Frankfurt Mover
Q-Cells Drops to Record Amid Financing Struggle
Jochen Eckel/Bloomberg
Solar panels are seen on the roof of the Q-Cells plant in Thalheim.
Solar panels are seen on the roof of the Q-Cells plant in Thalheim. Photographer: Jochen Eckel/Bloomberg
Q-Cells SE (QCE), once the world’s largest maker of solar cells, fell to the lowest on record after a regional court said it can’t defer payment of a 202 million-euro ($263 million) corporate bond due next month.
Q-Cells fell 18 percent to 41 euro cents at the close in Frankfurt, the lowest since it started trading in 2005. The company, based in Thalheim, Germany, said holders of the 2012 bonds will receive partial payments in tranches as it seeks to restructure convertible bonds due in 2014 and 2015 in a debt-to- equity swap. It forecast operating losses through 2013.
Q-Cells is in “intensive talks” with creditors to organize partial repayment of the bond by the end of February, Chief Executive Officer Nedim Cen said on a conference call. “We are on a good path and there are concrete suggestions for solutions on the table.” An insolvency “is not up for discussion at the moment,” he said.
Germany’s solar manufacturers are under pressure from Chinese rivals that have boosted capacity even as international prices slumped. Berlin-based module maker Solon SE (SOO1) and Solar Millennium AG (S2M), with headquarters in Erlangen, filed for insolvency last month.
“Q-Cells has a good chance of striking an agreement with the holders of the 2012 bond as the creditors would have a much more difficult time getting their money back in case of an insolvency,” Katharina Cholewa, an analyst at WestLB, said by phone from Dusseldorf today.
Forecast Loss
The 1.375 percent 2012 convertible notes were quoted at 49.5 percent of face value today, up from 48.5 percent yesterday, according to Stuttgart Exchange prices on Bloomberg.
Q-Cells forecast a loss of earnings before interest and taxes before restructuring costs of 90 million euros in 2012. It expects Ebit of 8 million euros in 2014. In the call, Cen said he didn’t want to make a prediction when Q-Cells would return to profit.
“The outlook for 2012 is a catastrophe and way below expectations,” Sven Olaf Kuerten, an analyst at DZ Bank in Frankfurt who rates Q-Cells “sell,” said in a note.
Q-Cells plans to invite shareholders to an extraordinary general meeting in coming days after it had to write down assets that resulted in losses of more than half of equity at the end of last year. The writedowns won’t directly affect liquidity, the company said.
Q-Cells had cash of 304 million euros at the end of the last financial year, Ina von Spies, a company spokeswoman, said by phone today.
Prices for solar modules dropped by about 50 percent last year, according to data compiled by Bloomberg, hurting manufacturers that were locked in long-term take-or-pay supply contracts. Take-or-pay contracts require buyers to take a product from a supplier or pay a penalty.
While Cen said he expects weaker prices in the solar industry to continue this year, the reductions will also “open entirely new markets” and offer chances for growth in the mid- term.
To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
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