Centrotherm Seeks Bankruptcy Protection as Solar Founders
Centrotherm Photovoltaics AG (CTN), a German solar manufacturing equipment-maker, sought bankruptcy protection, at least the 14th U.S. and European company to founder amid a global oversupply of photovoltaic modules.
The Blaubeuren-based company filed for Chapter 11-type protection in Ulm’s district court to start insolvency proceedings, Centrotherm said in a statement late yesterday. For three months, it will be shielded from creditors while its management tries to restructure, the company said. Centrotherm plummeted as much as 81 percent in Frankfurt today to its lowest level since it started trading in October 2007.
Centrotherm “continues to be able to manage its operations itself,” Chief Executive Officer Robert Hartung said in a separate statement. “Since we remain solvent, we can both process customer orders to schedule, and also pay our suppliers.”
Solar companies in the U.S., Germany and France, including Q-Cells SE (QCE), once the biggest solar-cell maker, have failed in the past year after struggling against lower-cost Chinese competitors and a glut. The global supply of photovoltaic panels is exceeding demand this year while at least 20 gigawatts of manufacturing capacity will close, according to Bloomberg New Energy Finance data.
Centrotherm sells production lines used to make polysilicon, ingots, wafers, cells and panels. Sales took a hit as solar manufacturers delayed or canceled investment plans to expand production after panel prices plunged 45 percent in the past year, slashing margins at the top five manufacturers, according to BNEF.
The activities of Centrotherm Management Services GmbH and Centrotherm Cell & Module GmbH are to be prospectively bundled within the parent company as part of the reorganization, Centrotherm said in the statement. All other subsidiaries in Germany and abroad will continue to operate as before and not participate in the insolvency protection proceedings, it said.
Centrotherm will have to cut costs and adjust capacity “to secure our company’s continued existence in the future,” Jan von Schuckmann, a board member responsible for restructuring, said in the statement. “This will allow us to maintain Centrotherm’s competitiveness in a difficult market situation.”
The company named insolvency lawyer Tobias Hoefer to the board in a bid to oversee the restructuring.
Centrotherm’s insurers stopped covering merchandise deliveries last month and banks closed its credit and guarantee lines, according to a June statement. The company in May reported a 42.9 million-euro ($53 million) loss before interest and tax in the first three months of 2012 and said it sees no improvement in the first half.
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