The Blaubeuren-based company filed the application with the Ulm District Court yesterday, July 10 to launch insolvency protection proceedings and to open the proceedings under its own administration. It is the second German photovoltaic company to do so. Previously, Solarwatt used the new restructuring law, under Germanys version of Chapter 11 The German Act Relating to the Further Simplification of the Reorganization of Companies (ESUG) which has been valid in the country since March 1, 2012. To qualify, the company in question must be solvent.
In a statement released, centrotherm said it intends to continue on with the implementation of its previously announced ct focus restructuring program. Meanwhile, the insolvency application is said to include the subsidiaries, centrotherm thermal solutions GmbH & Co. KG and centrotherm SiTec GmbH. Centrotherm management services GmbH & Co. KG and centrotherm cell & module GmbH are expected to be bundled within the parent company. The remaining subsidiaries have not been affected and "will continue to operate as previously".
CEO Robert M. Hartung commented, "Since we remain solvent, we can both process customer orders to schedule, and also pay our suppliers." However, the company added that liabilities originating before the application was filed cannot be fulfilled during the protection proceedings. It said that they will "nevertheless be satisfied as best as possible as part of the reorganization concept coordinated with creditors".
To aid the company in its goals, the Supervisory Board has appointed reorganization expert and insolvency lawyer, Tobias Hoefer to the Management Board as of today, July 11. He commented, "Given the insolvency protection proceedings, I see my new role as being a moderator of the interests of all parties involved in the proceedings. The joint objective of all these parties must be to maintain centrotherm as a company despite the serious market slump, and to lead it to a successful future."
As part of the restructuring program, centrotherm says it will focus on its core business areas, particularly in the area of mechanical engineering for the energy and high-tech industries. "We were, and are, world market leaders in thermal equipment and related technologies. We must, and will, invest further in this expertise, in order to maintain our technological and competitive league," continued Hartung.
He added that centrotherm is seeing "high demand" in emerging markets like the MENA (Middle East and North Africa) region. He said, however, that the company would now "contribute only its expertise and products as a technology partner in major projects when tapping such potentials, in order to thereby limit risks". It has further been noted that further capacity adjustments and cost reductions are required to be made by the company.
In March, centrotherm first unveiled its ct focus restructuring program. At the time, the company said the goal was to place more emphasis on crystalline silicon. A result of the program, capacities were adjusted to match market requirements, and 400 jobs from 1,928 were expected to be cut by mid-2012. Overall, centrotherm aims to save 22 million a year by the end of 2013.
Then in mid-June, it announced the appointment of a new chief restructuring officer (CRO), Jan von Schuckmann, to help implement its restructuring program. At the same time, Hans Autenrieth, company founder and management board member stepped down from his position. It is believed, however, that he will remain a consultant to centrotherm.