UPDATE 2-SolarWorld warns bondholders of restructuring

Thu Jan 24, 2013 4:26pm EST

* Company sees good chance it can remain a going concern

* Bondholders owning 550 mln eur in debt to see haircuts

* Shares fall 6.4 pct in late Frankfurt trade

FRANKFURT, Jan 24 (Reuters) - German solar group SolarWorld warned it would need to make a "serious adjustment" to its debt to remain a viable company.

The solar industry is wrestling with fierce competition, falling government subsidies for solar energy and oversupply - a combination that has already undermined large players such as U.S.-based Solyndra and Germany's Solon.

SolarWorld said late on Thursday that management believed there was a "predominant degree of probability" that it will remain a going concern if debtholders can agree on restructuring of the group's financial liabilities.

"Management will continue to review the going concern prognosis and will initiate solution-orientated discussions," it said in a statement after the close of markets.

Bondholders holding securities worth 550 million euros in total and maturing in July 2016 and in January 2017 would be hit most, according to the company.

Lenders carrying SolarWorld's assignable bank loans on its balance sheet would also likely take a cut, it added.

As of the end of September, the company had cash of 232 million euros ($310.3 million) on its balance sheet, and long-term debt of 1.03 billion euros.

SolarWorld is also the latest German solar group to announce debt restructuring measures, following former heavyweights Conergy as well as Q-Cells, which filed for insolvency last year after months of grappling with creditors.

SolarWorld said in November it expected 2012 earnings before interest and tax (EBIT) to be "significantly negative", blaming oversupply of modules and alleged price dumping by Chinese peers, leading module prices to fall 40 percent in 2012.

A group of 25 European solar panel companies led by SolarWorld in September filed a complaint with the European Commission, claiming Chinese rivals were unfairly benefiting from illegal subsidies and adding to an earlier complaint against Chinese competitors.

SolarWorld's Frankfurt-listed shares closed down 6.4 percent after the news.