Centrosolar fails to get quorum for creditors' meeting

Insolvency-hit Munich solar company Centrosolar yesterday announced a setback in its plans to continue to operate solely through its U.S. business Centrosolar America.

The company announced a plan, on February 27, to continue with a slimmed down Centrosolar Group holding company and the U.S. business with the possible addition of its Renusol mounting systems business if a purchasor cannot be found for that unit.

But plans to start the ball rolling on that reorganization hit the buffers today when Centrosolar revealed the necessary quorum of creditors had not registered in time for a planned creditors’ meeting today.

As part of the reorganization, creditors were to be asked today to back a plan to swap a portion of the monies owed them for shares in the successor company with any monies raised by a sale of Renusol also being used to meet obligations.

Centrosolar today announced that although 99.8% of those creditors who did register for the meeting indicated their willingness to back the proposal, the holders of only around 37% of the bond in question had signed up for the event, falling short of the 50% required to validate a decision.

Centrosolar will now try again with a second meeting – with a lower quorum of holders of 25% of the bond capital – arranged for April 14, ahead of a May creditors’ meeting which would be required to approve the restructuring under German insolvency laws.

Grim annual figures

The mishap came as Centrosolar reported grim unaudited figures for 2013 – the year which saw its main Centrosolar AG, Hamburg unit and its own subsidiary Centrosolar Sonnenstromfabrik GmbH file for insolvency, on October 18.

The Centrosolar Group AG parent company says the costs of the insolvencies account for some €7.2 million (US$10 million) of write-downs on bank loans and €3.5 million to €4 million of inventory hits within an overall estimated earnings before interest, tax, depreciation and amortization (EBITDA) loss of €12 million to €12.5 million for the year for the surviving units of the company, down from a €2 million loss in 2012.

Overall, the company expects to post an EBITDA loss of €23 million to €28 million for the year, up from €19 million in 2012 with consolidated revenues falling from €186 million to €96 million.

The news the Centrosolar Group board anticipates a ‘balanced’ set of results for 2014 after the cost of completing the insolvencies is stripped out may be given short shrift by investors ahead of the second attempt to win over creditors.