Gehrlicher Solar sunk by termination of $110 million bank loan


Gehrlicher Solar AG said on Tuesday that it was forced into insolvency on Friday after its banks canceled an €85 million credit (US$109.5 million) line announced in May. The company said the "filing was an immediate and direct response to the announcement by the banking consortium to terminate the €85 million loan."

Gehrlicher added that the European Commission's decision to impose EU-wide punitive anti-dumping tariffs on Chinese modules had led to "a deterioration of market conditions in Europe" and as a result it was no longer able to fulfill its business plan upon which the two-year loan agreement extension had been signed three months ago.

Management board member and chief operating officer Richard von Hehn urged European leaders to act quickly in the trade dispute with China: "Anti-dumping tariffs on modules do not help anyone, not even those who request them, because they destroy jobs throughout the whole PV value chain."

Hehn added that the German federal government and the European Commission "must take action and solve the issue at the political level before the summer break, otherwise further damage to the industry will result."

Nevertheless, Stefan Parhofer, Gehrlicher management board member and CEO of Gehrlicher Solar America Corporation (GSAC), said Gehrlicher had already received the first inquiries from interested investors.

The company stressed that its independent subsidiaries, particularly GSAC, were not directly affected by the parent's filing. The U.S. division, which is based in Springfield, New Jersey, and operates additional offices in Tempe, Arizona, and Boston, Massachusetts, has continued to expand its operations in North America and is forecasting 2013 revenues of between $130 and $150 million.

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Parhofer offered an optimistic outlook: "We operate completely independent of the German organization and are therefore not directly affected by the parent’s filing. Our business partners can rely 100% on us to continue to execute projects to the highest standards."

Also not affected by the filing is Gehrlicher Solar Management GmbH (GSM), Gehrlicher's Germany-based independent sister company, which manages some 25 solar investment entities.

"We have been working for the energy revolution since 1994, long before the term came into fashion, because we have always believed in the potential of photovoltaics," said Gehrlicher Solar founder, owner and CEO Klaus Gehrlicher. "Even though I am personally very much disappointed, we are proud that, together with other pioneers of the solar industry, we have the privilege to be one of the trailblazers of affordable solar energy around the world."

The Gehrlicher group has grown from a one-man company to become one of the world's largest project developers and system integrators in the photovoltaic industry. At its peak in 2010, the group had more than 400 employees and achieved global sales of nearly €350 million while remaining family owned.

Oliver Schartl of the Munich-based law firm Müller-Heydenreich Beutler & Kollegen (MHBK), who was appointed by the Munich District Court as the company's insolvency administrator, said he saw a reasonable chance of a viable future for a large part of the company’s operations: "The company has an excellent reputation in the market, large technological know-how, about 200 MW of operations and maintenance under contract and is very well positioned in the U.S., which has become one of the most important markets in PV."

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