German solar cells maker Q-Cells SE (QCLSF.PK) confirmed Monday that it will file for insolvency proceedings on Tuesday at the competent Insolvency Court in Dessau. The move follows the final ruling of the Frankfurt Higher Regional Court in the Pfleiderer AG case a week ago that has prevented it to go ahead with its existing debt restructuring plan.
Earlier, Bitterfeld-Wolfen-based Q-Cells had reached an agreement with major bondholders on a restructuring plan to swap debt for equity, and additionally, reached agreements with the involved authorities in Germany and Malaysia. The bonds were issued by Q-Cells International Finance B.V. on the basis of the 2009 German Bond Law.
"Following an intensive review of alternative concepts for the implementation of the financial restructuring, the executive board has reached the conclusion that a going concern of the company cannot be restored on a sufficiently secure legal basis," the company said in a statement.
Following the news, Q-Cells shares tumbled 42 percent in Monday's regular trading session on Frankfurt's Xetra stock exchange to its lowest price on record of 0.13 euros. QCLSF.PK is also trading at $0.20, down $0.12 or 37.50% on a volume of 5,300 shares.
The company has been hit plunging prices due to over supply of solar panels and declining government subsidies across Europe, creating turbulence in the global solar market.
Q-Cells, once the world's largest maker of solar cells, now joins peers such as Solar Millennium and Solarhybrid, both of which filed for insolvency recently, as well as Evergreen Solar, SpectraWatt and Solyndra, all these three from the U.S.
Q-Cells noted that it will now work together with the preliminary insolvency administrator to secure the continuity of the company within the insolvency proceedings.
Earlier, the final ruling saw the company review alternatives for implementation of the financial restructuring plan, and the company's Executive Board concluded that it sees no going concern for the company as restoration is not possible on a sufficiently secure legal basis. The company then decided that filing for insolvency proceedings is legally necessary.
Q-Cells reported last week a net loss of 845.8 million euros in fiscal 2011, compared to prior year's profit of 18.9 million euros due to the severe-than-expected economic environment and certain extraordinary items. Sales plunged to 1.02 billion euros from prior year's 1.35 billion euros, but surpassed its target of more than 1 billion euros.
The company also had projected another loss making year in 2012, following intense competitive pressure and consolidation. However, after implementing the financial restructuring and medium-term business plan, the company is expected to return to a positive EBITDA for fiscal 2013.
by RTT Staff Writer
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