Conergy to Sell Main Brand to Kawa in Sales Unit Disposal
Stock Chart for Conergy AG (CGYK)
The transaction, due to be completed in the second half of August, will focus on Conergy’s main brand and most global sales and service activities, Antje Stephan, spokeswoman for Conergy, said by phone. She didn’t disclose the price. It will exclude module production activities, which in the last two years have become a secondary business for Conergy.
“We see a large potential in structuring and financing solar facilities across different jurisdictions, from residential to commercial rooftop to smaller-scale utility projects, by packaging the predictable cash-flow streams into special financing vehicles,” Daniel Ades, managing partner of Miami-based Kawa, said in a statement.
Conergy and its domestic counterparts are under pressure as subsidies for renewable energy fall at home and competition from China depresses margins and panel prices. Producers in the German industry that have filed for bankruptcy since late 2011 include Solarworld AG (SWV), the country’s biggest maker of panels, Solar Millennium AG (S2M), and Q-Cells SE.
Conergy produces only about half of the modules it sells, and has been focused on planning, servicing and financing solar farms, according to Stephan.
“Kawa is our preferred partner,” and the initial accord follows months of talks following an agreement “a long time ago” on strategy, Conergy Chief Executive Officer Philip Comberg said in a statement. “In the last two years, we have consistently focused Conergy on our strengths in international sales and services. We want to sustainably implement this downstream strategy in the international solar markets with a strong financial and strategic partner.”
Conergy jumped as much as 17 percent to 11 cents, the biggest intraday gain since February 2012. It was up 5.4 percent at 11 a.m. in Frankfurt. On July 5, the day of the insolvency filing, shares fell as much as 71 percent. That was the most since the company’s March 2005 initial stock sale.
The units being sold include the domestic entities Conergy Deutschland GmbH and Conergy Services GmbH as well as branches in North America, Asia and Europe. Those units aren’t subject to the insolvency proceedings. Kawa also plans to take over service and sales departments in Hamburg and Zweibrücken, Germany.
The planned transaction affects 670 of Conergy’s 1,200 employees, many of which will be able to keep their jobs, Stephan said, without giving details. The fate of the 530 production jobs will be determined by negotiations between the insolvency administrator and potential investors.
Conergy filed for insolvency on July 5 and stopped its module production in Frankfurt an der Oder near the Polish border after a delay in payments from a large project and the failure of executives to bridge the financial gap.
Conergy said in a separate statement that manufacturing at its insolvent Conergy SolarModule GmbH & Co. KG will resume on Monday. Negotiations about the future of its unit Mounting Systems GmbH in Rangsdorf near Berlin continue.
Conergy’s sales last year dropped 37 percent to 473.5 million euros while the net loss widened to 99 million euros.
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