Centrosolar approves US-focused restructuring program

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A committee of creditors tasked with overseeing the financial restructuring of Centrosolar Group AG – the German-headquartered supplier of PV systems and components – voted yesterday in favor of board proposals to focus solely on the U.S. market.

Should the proposals be passed, Centrosolar Group AG will continue to trade through Centrosolar America Inc., turning its full attentions to the U.S. solar sector – a market that has comprised more than two-thirds of the company’s revenue in the past 12 months.

In doing so, the only other two areas of the business that are not insolvent – Renusol GmbH and Centrosolar Grundstücksverwaltungs GmbH – will be sold. Centrosolar AG and Centrosolar Sonnenstromfabrik, both currently insolvent participants in the company, are to be restructured ouside of the insolvency plan and will no longer be part of Centrosolar Group AG.

As announced yesterday in a press statement issued by Centrosolar Group AG, previous shareholders in the company will lose their status of owners and will not be eligible to compensation. The subordinated loan will also lapse.

Non-subordinated creditors will be in line for compensation. Recompense is being planned in two ways: either proceeds from the sale of Renusol and Centrosolar Grundstücksverwaltungs will be distributed among the non-subordinated creditors, or they will receive the company’s shares through transfer, with the company’s creditors waiving their unsettled claims in return.

These creditors will receive one share per an amount claimed of €132.67, which for bond creditors translates to eight shares per each bond of a nominal value of €1,000.

In order to strengthen liquidity, a capital increase for cash will also be effected, and will initially be offered for subscription to the previous non-subordinated creditors as new shareholders.

The implementation of these proposals are dependent on various economic and legal conditions being met, such as the failure to secure buyers for the proposed sale of the two solvent subsidiaries. In this scenario, the Management Board and creditor’s committee may allow these participants to continue to operate as part of Centrosolar Group AG.

The first meeting of the bond creditors is scheduled for March 18, who represent the largest group of creditors affected. Once the vote has been passed by them, a creditors’ meeting under insolvency law will be called, probably before the end of April. If the insolvency plan is approved, changes can then be implemented from the end of May.

The die was cast in October last year when both Centrosolar AG and Centrosolar Sonnenstromfabrik GmbH lost their protective shield as the Group thrashed around for ways to stay afloat. This latest announcement sees a further cutting of ties with Europe as Centrosolar Group AG looks to capitalize on its strong performance stateside, where it has recently entered into a partnership with TSMC Solar to deploy the Taiwanese company’s CIGS modules across the North American market.