March 7 (Bloomberg) -- Solarhybrid AG, a German developer of solar energy projects, had a record drop in Frankfurt trading after saying that government plans to eliminate aid for large-scale power plants threaten its business.
Solarhybrid fell 59 percent to 1.02 euros a share, the steepest one-day plunge since the stock started trading in June 2008. Germany’s plans to scrap state support for solar plants bigger than 10 megawatts after July 1 would threaten four projects, including a planned 150-megawatt solar power plant in Brandenburg, Solarhybrid said in a statement today.
“Solarhybrid’s entire business model in Germany has been put into question,” the developer said. The planned cuts have also eliminated the company’s ability to raise money via bank loans or corporate bond and share issues, it said.
The company, based in Brilon, said it may not publish its full-year report in March and it’s in talks to secure alternative financing for the planned acquisition of German developer Solar Millennium AG’s 2.25 gigawatts of projects in the U.S. Until yesterday, Solarhybrid had planned to issue a corporate bond to finance the purchase, it said.
Solarhybrid developed six large-scale plants in Germany last year, including the 60.4-megawatt FinowTower II project, according to its website. It has since focused on expanding abroad by purchasing project rights in Israel and the U.S.
Germany, the world’s biggest solar market by total capacity, plans to cut aid to the industry by as much as 29 percent and further scale back subsidies each month, beginning in May, Environment Minister Norbert Roettgen said on Feb. 23. The cuts are deeper than the 15 percent reduction ordered Jan. 1 and may hurt manufacturers in Germany and China, where the world’s three largest panel makers are based.
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