Jan. 29 (Bloomberg) -- Centrotherm Photovoltaics AG’s creditors and shareholders approved a plan aimed at returning the German solar power-equipment maker to profit next year including a cut in share capital and a debt-for-equity swap.
A majority backed an insolvency plan for the company, which sought bankruptcy protection in July, at a meeting today in Ulm, Centrotherm said in a statement. Capital will be reduced by 16.9 million euros ($23 million) with one share replacing every five currently. It will rise to 21.1 million euros after creditors swap 70 percent of the company’s unsecured debt for equity.
Centrotherm sought bankruptcy protection after orders from its photovoltaic cell and panel making clients dried up because of an industry glut. The plan will cut debt and may save the workforce of 1,000, the Blaubeuren, Germany-based company said.
“For shareholders, millions of euros’ worth of value, the stock market listing and the value enhancement potentials of their shares remain,” Tobias Hoefer, a member of the board, said in the statement. “Creditors stand a good chance of realizing 100 percent of their receivables, or even more.”
Centrotherm declined 2.4 percent to 1.49 euros in Frankfurt trading, giving up part of its 20 percent gain from yesterday. The company has lost 88 percent of its value in the past year.
Once the swap is done, creditors will own 80 percent of the business via an administration company, and current shareholders the rest. Centrotherm will be obliged to sell shares on the best possible terms and settle creditors’ claims from the proceeds.
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