Q-Cells unveils financial restructuring plan; releases updated 2012 guidance


The Germany-based photovoltaic company has today issued its financial liabilities restructuring plan, which encompass two main steps. It has also updated its medium-term business plan, which has revealed further losses, and released revised revenue forecasts to 2015.

Convertible bonds swap

Representing a setback for Q-Cells, the Frankfurt Regional Court yesterday, Monday, January 23, ruled that the new bond law from 2009 does not apply to its convertible bond due at the end of February 2012. Consequently, the move to appoint a joint representative, who could have deferred the convertible bond maturing in 2012 by order of the creditors, has been rejected.

While the company says it will appeal against this decision "in order to ensure it retains the option of a deferral as per the bond law", it believes it may be necessary "to reach individual agreements with the bond’s creditor", which would include partial repayments in tranches. It thus "plans to shortly make a public offer to those bondholders".

Meanwhile, in a second step, Q-Cells says it plans to restructure its convertible bonds due in 2014 and 2015 via a debt-to-equity swap.


Q-Cells has also revalued the carrying amount of investments of both its subsidiaries and tangible assets in its medium-term business plan, updated at the end of 2011. "This resulted in a loss in the individual financial statement of Q-Cells SE in accordance with German GAAP(HGB)," explained the company in a statement, "i.e. that losses occurred of more than half of the subscribed capital as per 31 December 2011. The final loss is still to be determined."

Despite this, Q-Cells has confirmed its €1 billion 2011 revenues forecast and has, at €304 million, exceeded its €300 million liquidity forecast.

Further losses in 2012

Q-Cells says it expects to incur further losses in the "challenging" 2012 financial year, according to its business plan, which has been validated by McKinsey. As such, sales revenues of €865 million have been forecast, while an EBITDA of €-14 million and an EBIT of €-90 million are expected.

The company remains confident looking ahead, and predicts that in 2013, revenues will reach €916 million, and a positive EBIDTA of €61 million will be achieved. Hitting 2014, it believes it will reap revenues of €1.1 billion, and achieve a positive EBITDA and EBIT of €99 million and €8 million, respectively.

As Q-Cells recognizes, however, a "fundamental precondition" of attaining these figures will be the successful implementation of its aforementioned financial restructuring plan.

The company concludes on a high note by stating, "After the anticipated massive global sector consolidation, Q-Cells would consequently be able to continue operating as an independent company and benefit from the expected growth in the photovoltaic market as from 2014."

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