Analysts not surprised by Conergy insolvency


With insolvency proceedings opening, the pressure on banks and creditors of Conergy AG could increase to a point where they agree to the restructuring plan submitted. There are parallel cases like Q-Cells and Solon which followed similar paths and filed for bankruptcy to allow foreign investor entry.

"The Conergy insolvency path is not the end, but there is also no guarantee that there will be a successful rescue," said Henning Wicht, senior director of IHS Global.

The financial world is surprised Conergy lasted this long. The company has been fighting negative cash flows as well as the impact of management failures since the days of Dieter Ammer and Hans-Martin Rüter leading the company.

In 2006, management decided to move the project developer into module manufacturing at the same time purchasing of countless renewable energy companies. The new additions were jettisoned two years ago for capital and debt restructuring.

By then the once shining beacon of German solar had burnt too much money. The recently published results for the first quarter of this year brought no good tidings as the financial analysts pv magazine spoke to mentioned. A negative equity of €100 million (US$128.8 million) and liabilities to suppliers of €150 million added up to a de facto insolvency.

Two years ago the Hamburg public prosecutor raised a case against former executives and board members including Ammer and Rüter. They were told to hold themselves accountable to the Chamber of Commerce of the District Court of Hamburg on suspicion of market manipulation, accounting fraud and insider trading.

No date was set for the process as a court spokeswoman told news agency dpa-AFX. It was not until the beginning of May that a settlement was reached between the former board members and the plaintiffs. With that, another discussion over possible compensation claims was concluded. The agreed amount of €6.3 million payable to Conergy by the executives was largely shouldered by insurer D&O-Versicherer AIG Europe Ltd.

Translated and edited by Shamsiah Ali-Oettinger