Dec. 14 (Bloomberg) -- Solon SE slumped the most in eight years in Frankfurt trading after becoming the first publicly traded solar company from Germany to file for insolvency.
Solon, which in 1998 was the country’s first listed photovoltaic producer, fell 46 percent to 50.2 euro cents. The Berlin-based company filed for insolvency after failing to reach an “amicable solution” with banks and investors, it said in a statement yesterday.
Solon had sought to speed up cost cuts and extend a year-end deadline to repay a 275 million-euro ($357 million) loan to Deutsche Bank AG and a group of seven German banks.
The country’s solar manufacturers including Q-Cells SE and Solarworld AG are reeling from rising foreign competition just as demand ebbs in Germany, the biggest photovoltaic market last year. Chinese companies have increased production capacity even as international prices slumped, tipping three U.S. solar companies including Solyndra LLC into bankruptcy this year.
“I would be surprised if Solon remains the only European company struggling” as lower prices and overcapacity will weigh on margins next year, Henning Wicht, an analyst at researcher IHS Isuppli, said by phone from Munich.
Solon is seeking “to use opportunities to restructure within the insolvency process,” Therese Raatz, a spokeswoman, said by phone today.
The insolvency administrator, Ruediger Wienberg of law firm HWW Wienberg Wilhelm, arrived at company headquarters in Berlin and started talks with company executives, Sylvia Ratzlaff, a spokeswoman for Solon, said by phone.
“According to our forecasts, Solon would not have been able to cover its financing costs before 2014, despite the assumption of massive cost cuts and a strong sales increase in 2013,” Katharina Cholewa, a WestLB AG analyst, said in a note.
Solon employs more than 800 people at subsidiaries in Germany, Italy, France and the U.S., according to its website.
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