S.A.G. Solarstrom AG will file for insolvency after talks with creditors and investors to refinance the German developer of solar-power plants failed.
The Freiburg-based company will make its application today and won’t pay interest on its corporate bond due Dec. 16, it said in a statement. Contracts for projects in Italy and Germany were delayed, draining liquidity, the company said.
“Within less than four weeks, we were confronted with a situation which was completely unforeseeable for us,” Chief Executive Officer Karl Kuhlmann said in the statement. “Altogether, a sum of over 20 million euros is lacking.”
European solar developers, like panel makers, are suffering from shrinking markets in the region as countries cut subsidies and limit ground-mounted projects. Annual installations may drop to less than 10 gigawatts this year from about 17 gigawatts in 2012, according to the European Photovoltaic Association.
German companies including Conergy AG and Solarhybrid AG, also hit by increasing competition from China, have filed for protection from creditors in the past two years.
Solarstrom, employing about 200 people, plans to conduct its own insolvency administration and will work on a recovery plan in the next three months. Its shares were suspended in Frankfurt. It has a “very realistic chance” of restructuring due to its profitable units and experience, Kuhlmann said.
Solarstrom, founded in 1998, was one of Germany’s first listed solar developers. It had 188.6 million euros of sales last year and expected to make a profit for 2013 until Nov. 29.