Germany's Sunways to lay off 50 employees

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Just two days after the banks’ cancellation of their line of credit worth US$8.6 million, the LDK Solar subsidiary has decided to lay off around half of its 105-strong workforce at its factory located in Arnstadt, central Germany.

They will receive their dismissal notice in the next few days, reported the Ostthüringische Zeitung, referring to the company spokesperson. The management board has already reached an agreement with the works council on the redundancy packages.

The photovoltaic cell factory in Arnstadt has stopped production. Sunways is momentarily not able to cover the necessary production costs, continued the spokesperson.

On Tuesday, the banks canceled their line of credit ahead of time worth $8.6 million. Originally, the line of credit was set to expire in September of 2013. They are also demanding the liquidation of collateral securities, which were given as security by the debt-ridden company to obtain the loan. The management board is currently negotiating with the banks regarding loan repayment.

Over a year ago, LDK Solar became the major shareholder of Sunways AG. But the Chinese company also has numerous financial troubles, after two consecutive years of significant losses.

For instance, just week, LDK Solar announced that due to cash-flow shortage it would not be able to fulfill the payment of convertible notes worth around $ 24 million, thus leading to speculation over whether the company is the next Suntech.

Translated by Vera von Kreutzbruck