Inside the Singulus repositioning and debt restructuring


pv magazine: The restructuring of Singulus’ corporate debt would see it swapped for shares in the company. Why is this required?

Stefan Rinck: In order to secure the viability of the company on a sustainable basis and to make the strategic positioning successful, at first the restructuring of the capital structure of the company is required. This is because the current capital structure limits us in the financing of growth. The restructuring of the capital structure will lead to a debt-free company and we will be well positioned for the expansion of our activities in new markets.

Beyond this, how would you say Singulus is situated in 2015 to turn around the losses sustained in 2014?

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I would like to provide a little bit of background as to why we are where we are and why we showed this figures which are not very good. 2014 was difficult for us because we had in all of our business areas not enough business.

First of all our Blu-ray disc business, which is still a very important part of the company, dropped by 90% and this is difficult to overcome.

For this year we will see some improvements in the Blu-ray business, but maybe not as good as 2013, but better than 2014.

When it comes to solar that was also not very successful last year. Throughout the industry we expected rather steep increases or improvements in the overall situation because demand is increasing for solar modules and the production capacity is not matching the demand, so there is no overcapacity left anymore.

We all expected new order income last year for the equipment manufacturers, but this was still missing and we had to wait until the end of last year and the beginning of this year for the new wave to come in the solar market and a new investment cycle. This is something that now makes us a little bit more optimistic for this year. We have seen some nice order intakes in the first two months, so that is why we are now much more optimistic.

Looking at solar, what are the areas of production that you are most optimistic about? We have seen a lot of activity in the PERC space of late for tool suppliers.

There are different areas. As you know we are an equipment supplier for special coating machines and wet chemistry treatment machines and we see good opportunities in many different areas.

When it comes to CIGS we have received some nice orders at the beginning of this year from Hanergy in China. Hanergy began at the end of last year to build up a huge production capacity for CIGS in China and we received an order for our wet chemistry coating machine, the chemical bath deposition for the buffer layer, and we also picked up an order for sputtering machines to coat certain materials onto the glass.

We also see some other customers moving forward with CIGS and starting to think about new investments in that area. So I would say CIGS is really something where we will see in the near future growing production capacity around the world.

The other area is PERC, as you mention. We have some orders for aluminum oxide coating in that area. That is where we see customers investing in the upgrade of existing production lines to improve the overall efficiency. But that is only an intermediate stage.

In the long term we see some interesting investments going forward in terms of heterojunction (HJT) cells. This is really the new technology that is able to go up to 23% or 24% efficiency and this is the new technology where we will see some investments going forward in the future.

Do you see PERC and heterojunction as competing technologies, as in if one succeeds the other will fail?

If you ask me, of course for the future HJT has a lot of opportunities and if you look at the overall cost of cells with heterojunction technology, they are really competitive. HJT has a lot of cost advantages because of this high efficiency potential. But of course it requires a complete new investment.

No production equipment currently being used in today’s c-Si or PERC production can be used in HJT production. So that means a lot of customers have to decide as to whether they go for an upgrade with existing lines to increase to 20% to 21% efficiency or should they do a big step forward and begin with a greenfield approach and invest in HJT.

This is a difficult decision and each customer has to take this individual decision depending on its own conditions and situation by itself. Really if a producer has a huge production capacity that is not depreciated, then maybe it is better to go for PERC upgrades with a rather limited investment and have a 1% or 2% efficiency increase. But if a manufacturer is starting new or is investing into capacity expansion and more cost effective technologies, then it is better to jump directly to higher efficiency for the future.

Some weeks ago pv magazine was speaking with Martin Green from UNSW and he said he can foresee multi PERC efficiencies around 23% or 24% in the future. This would make it very competitive with HJT would it not?

Of course! If this can be realized it would be very cost competitive. But at the moment we are far away from that efficiency level, it is below 20% with multicrystalline, which means there is a very long way to go. But if this is possible and there are new ideas out there, then this could be a very interesting technology.

Looking at the manufacturing landscape, there seems to be positive signs from the U.S., Southeast Asia continues to grow, India is looking better, are you seeing more geographic diversity in terms of the potential customers with which you’re speaking?

Absolutely we are. We have seen some very interesting markets emerge for PV manufacturing equipment in Europe, in Asia, and now the world becomes more colorful, so to speak.

We see a much broader investment cycle going forward in other areas in the world including North America, South America, Eastern Europe, North Africa and South Africa, which means that the investment into solar modules, solar farms and also solar equipment is becoming much broader, which is very promising.

Looking towards your CIGS activities, some questions have been raised about Hanergy Thin Film, its business model and activities in the press. How confident are you in Hanergy TF as a partner?

Hanergy is really a brilliant example for a Chinese solar company. Hanergy has a fantastic position, it is one of the leading solar companies when it comes to market capitalization, it is moving forward very successfully. It also has a lot of experience in energy because it is already producing a lot of electricity with hydropower, with wind and it has a lot of factories running with amorphous silicon, so it is a very experienced company.

Hanergy is also not only located in China, it has activities in North America, it is in Europe and Hanergy has acquired companies in these areas. So that means that Hanergy has a lot of management available that knows what is necessary to do to bring the company forward. So we are really looking very optimistically towards the cooperation with this huge company and it will be a fruitful partnership for all of us.

I understand that you have some new offerings on a technological basis for CIGS production, what can you tell me about that?

During the time that was very difficult for all of us as solar equipment suppliers we have developed out machines further. We have some nice features now available. For our wet chemistry deposition machine, called Tenuis, for the buffer layer for CIGS. This is now a machine with much higher throughput, so we can decrease the cost of production incurred with this machine and for this production step drastically. In parallel we’ve been able to increase the efficiency slightly, which is an important step for our customers.

With the next generation Tenuis machines, which in the CIGS market is a well known machine, we now have an improved generation with the first tools being shipped to China at a Hanergy plant.

The second machine is a completely new sputter machine, which is very cost effective and compact meaning the space requirement for this machine is very limited and at the same time we could show some very nice layers that are excellent in homogeneity helping to increase the efficiency further up for CIGS.

There have been references to a Q1 2015 order book of around €60 million (US$65.2 million) in your communications. What are you looking for 2015 and will that return Singulus back into the black?

We have now an order book of more than €60 million with some smaller orders and two bigger orders. One of the big orders is for CIGS and the other, nearly €30 million ($32.6 million) is for new cell technology. We see that this is only the beginning and we will see some more orders to come during the course of this year. I hope that this is now a new investment cycle so that we also will see some interesting investments in 2016 and 2017.

We intend to deliver a positive development in the year 2015 and a substantial increase in sales compared with 2014 and this will bring the company close to break even again.

Can you tell me more about the €30 million new cell technology order?

This is an important order for us because last year, during the course of the PV fair in Amsterdam, we could release a complete new machine to produce new cell technology cells and this machine was a kind of breakthrough in the market.

Everyone is very excited by the performance and the productivity of this machine. That is the reason why we received a lot of orders for this machine just for new cell technology cells.

Of course we have signed a confidentiality agreement with the customer and we are not allowed to talk a lot about it.

We really do see some light on the horizon. Some more orders will indicate that the solar market will really jump forward again, and that is what we are all hoping for.

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