The Germany-based wafer slurry recycler announced earlier this month that it would develop a restructuring plan to ensure the companys liquidity in the coming weeks and had agreed to defer upcoming payments with its major creditors.
However, following an application by SiC Processing to the Amberg Court on December 18, the court has ordered debtor-in-possession proceedings in accordance with section 270b of the German Insolvency Code. Hubert Ampferl, partner of Nuremberg-based law firm Dr Beck & Partner, has been appointed preliminary supervisor.
SiC Processing's management now has three months to present a detailed restructuring plan to the court, with the help of Hubert Ampferl, law firm Ashurst and investment bank Freitag & Co. The plan must then be reviewed by the court and approved by the creditors' assembly, in order to revoke the self-administration proceedings.
Prior to the filing, "intensive" restructuring efforts were said to have been implemented, including moratoriums with individual creditors. Peter Thysell was further appointed managing director and Chief Restructuring Officer.
He is said to be confident on the back of the latest news: "The protection proceedings offer the necessary flexibility for a comprehensive and sustainable reorganization of the Company," he said. Under self-administration, SiC Processing remains fully able to operate and employees' salaries for the next three months will be covered by Germany's Federal Employment Office.
"The Company has struggled increasingly with the continuous decline in prices and severe over-capacities in the solar sector … The Company still faces high payment arrears for several customers. In light of the coupon payment for its 82m bond, which is scheduled for March 1, 2013, the Company is threatened with inability to service its debt, pursuant to section 18 para. 2 of the German Insolvency Code," explained SiC Processing in a statement released.
While no other subsidiaries are said to be part of the proceedings, SiC Processing announced on December 11 that its Norwegian subsidiary, SiC Processing AS, submitted a petition for insolvency at Norways Porsgrunn district court.
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