12 July 2012

centrotherm photovoltaics files for insolvency proceedings under its own administration

centrotherm photovoltaics AG of Blaubeuren, Germany, which provides equipment and turnkey production lines for manufacturing both crystalline silicon solar cells and copper indium gallium diselenide (CIGS) thin-film solar modules, has applied to the District Court of Ulm to launch Chapter 11-type insolvency protection proceedings (pursuant to the German Act Relating to the Further Simplification of the Reorganization of Companies [ESUG], and Section 270b of the German Insolvency Directive [InsO]). It has also applied for insolvency proceedings to be opened under its own administration.

With the help of these proceedings, the firm aims to pursue the reorganization path that it had already adopted. The application includes the subsidiaries centrotherm thermal solutions GmbH & Co KG and centrotherm SiTec GmbH. The activities of the companies centrotherm management services GmbH & Co KG and centrotherm cell & module GmbH are prospectively to be bundled within the parent company. All other subsidiaries, both in Germany and abroad, will continue to operate as previously, and will not be involved in the insolvency protection proceedings.

ESUG (an instrument to provide protection to firms in insolvency proceedings) only came into force on 1 March, and allows companies to restructure themselves based on a coordinated reorganization and future concept. During the ‘protective’ phase (limited to three months), the firm is largely protected from creditors' enforcements and sanctions, and can remain fully operational.

centrotherm photovoltaics says that its management and supervisory boards are convinced that this step is the best option in the firm’s current difficult situation in order to complete the group's reorganization, in the interests of employees, customers, suppliers, shareholders and creditors, and hence to secure the group as a going concern.

To support these moves, the supervisory board has appointed reorganization expert Tobias Hoefer to the firm’s management board. As a specialist insolvency lawyer, Hoefer specializes in highly complex corporate reorganizations.

“Given the insolvency protection proceedings, I see my new role as being a moderator of the interests of all parties involved in the proceedings,” says Hoefer. “The joint objective of all these parties must be to maintain centrotherm as a company despite the serious market slump… The insolvency protection proceedings offer the best opportunities to achieve this, and I believe that my more than 15 years of experience as a corporate reorganizer, and as an insolvency administrator, can be of use in the necessary settlement of interests,” he adds.

Business operations at centrotherm photovoltaics and the other group companies are currently continuing as normal, with customers continuing to receive the same engineering and services, technology and products, the firm stresses. “The protection provided by the ESUG creates the necessary scope to realize a balanced and sustainable future concept that lies in the interests of all participants in the proceedings,” says CEO Robert M. Hartung. “At the same time, centrotherm photovoltaics AG continues to be able to manage its operations itself. Since we remain solvent, we can both process customer orders to schedule, and also pay our suppliers,” he adds. However, liabilities that were originated before the application for the insolvency protection proceedings was filed cannot be satisfied during the protection proceedings. Nevertheless, they will be satisfied as well as possible as part of the reorganization coordinated with creditors, says the firm.

Concentrating on technological strengths and core business areas, such as mechanical engineering for the energy and high-tech industry areas, is to form the cornerstones of the firm’s future concept, which is to be elaborated further over the coming weeks. “We were, and are, world market leaders in thermal equipment and related technologies,” claims Robert M. Hartung. “We must, and will, invest further in this expertise.”

Hartung believes that, with its products, centrotherm can be a technology and efficiency driver for the global energy revolution, and realize grid parity. centrotherm photovoltaics is experiencing high demand, particularly in new markets such as the Middle East and North Africa (MENA) region, he notes. This development offers great potential for the future, Hartung reckons. Nevertheless, in contrast to the firm’s previous approach, in order to limit risk it will now only contribute its expertise and products as a technology partner in major projects when tapping such potential.

However, given the slump in the solar industry over recent months and the resultant decline in orders and sales, further capacity adjustments and cost reductions are required. “We require further structural adjustments in order to secure our company’s continued existence in the future,” notes Jan von Schuckmann, management board member responsible for restructuring. “This will allow us to maintain centrotherm’s competitiveness in a difficult market situation,” he adds. “In parallel, we will continue to invest in research & development, and extend our extraordinary market position.”

Tags: centrotherm photovoltaics CIGS

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