Sunways heads back into insolvency

Stricken German solar manufacturer Sunways AG‘s respite from insolvency has lasted only seven months with the Konstanz-based subsidiary of debt-hobbled Chinese parent LDK Solar filing to re-enter proceedings today.

The solar cell, module and inverter manufacturer announced yesterday it will today file for insolvency with the Konstanz local court ‘due to the illiquidity of the company.’

Sunways exited an insolvency brought on by one of its creditors BW Bank – a Stuttgart-based lender – in August, after renegotiating the terms of two crippling wafer purchase agreements and the terms of its bank loans.

Sunways board ‘in talks with investors’

The latest move comes, according to yesterday’s statement, at a time when the Sunways board is ‘already in talks with potential investors’ and the company says its aim is to find a ‘viable restructuring’ and agreement with its creditors.

Chinese parent company LDK, itself struggling under an eye-watering debt pile and whose future seems even more precarious in the wake of recent high-profile Chinese solar defaults by Chaori Solar and Baoding Tianwei Baobian Electrical, owns a 71% controlling stake in Sunways.

With the latest insolvency proceedings affecting both the Konstanz-based Sunways AG and its Arnstadt-based Sunways Production subsidiary, the directors may be looking to the Middle East where wealthy investors have recently shown a desire to harness European solar expertise by acquiring ailing businesses.

Sunways had exited insolvency proceedings last year by wiping an estimated €10 million liability off its balance sheet by making an undisclosed one-off payment to settle the wafer purchase agreements, due by the end of last October, as well as renegotiating €7.6 million of bank loans by persuading lenders to take a €1 million haircut in return for a €5.6 million settlement, due by the end of last August, and a further €1 million payment in August 2015.