Having filed for insolvency with the Freiburg District Court last month, Solarstrom yesterday announced the onset of proceedings, on March 1, will see a switch to ‘general insolvency proceedings’ because, as the company press release states: "The opening proceedings have shown that both investors and creditors have only limited experience with the comparably new process of self-administered insolvency."
Although the developer reiterated it has a restructuring plan in place, a separate release issued by Solarstrom yesterday announced it had handed Roland Berger Strategic Consultants the task of finding a new investor to save the stricken firm.
Yesterday’s developments put the tin hat on a grim quarter for the company which was derailed by cashflow problems from its operations in Italy and the UK last month.
UK deal collapse precipitated crisis
Solarstrom’s announcement, on December 5, that it had been unable to close a deal to develop a ‘three-digit-megawatt’ scale portfolio thought to be in the UK because of the onerous upfront guarantees required of it, led to the company having its BB+ credit rating suspended by agency Creditreform Rating the following day and saw the developer’s S.A.G. Solar UK Ltd subsidiary subject to a creditors’ application for administration proceedings on January 28.
When announcing that news, Solarstrom pointed the finger at UK energy watchdog Ofgem which it said had derailed the project through ‘delayed accreditation’ of the German company.
Italian delay meant missed payment
By that stage, Solarstrom had been forced to open insolvency proceedings, on December 13, because of a separate deal in Italy. The delayed payment of a ‘mid single-digit million euro’ figure for a portfolio, thanks to legal proceedings, meant no interest would be paid on the company’s 2010/15 bond, due three days later, admitted the developer.
On December 23, Solarstrom’s Italian subsidiary, S.A.G. Solar Italia s.r.l., announced the parent company’s insolvency meant it could not recover a presumably identical ‘mid single-digit million euro’ figure it claimed it was owed by the Freiburg company and gave the Italian business 180 days until June 21 to submit a settlement offer to creditors.
S.A.G. Solarstrom’s search for an investor is hardly likely to be helped by its admission to pv magazine, in the wake of the collapsed UK deal, that it was considering whether its business model was still viable.
The company’s operations are continuing but capital-intensive projects such as factory building are on hold while the search for an investor continues.