UPDATE 1-German wind parks group Prokon files for insolvency

Wed Jan 22, 2014 12:30pm EST

Related Topics

* Prokon had raised 1.4 bln euros from retail investors

* Warned last week of potential insolvency

* Prokon operates 50 wind parks in Germany and Poland (Rewrites, adds detail, background)

FRANKFURT, Jan 22 (Reuters) - German wind park group Prokon, which had raised 1.4 billion euros ($1.9 billion) mainly from retail investors, has filed for insolvency, a court in the north German town of Itzehoe saidon Wednesday.

An administrator has been appointed for Prokon Regenerative Energien GmbH, the court said in a statement.

The company, which operates 50 wind parks in Germany and Poland and employs roughly 1,300 staff, had raised money by selling so-called profit-participation certificates which were marketed to investors through advertising campaigns on German prime-time television.

Profit-participation certificates offer high interest payments but the investor also participates in the losses of a company. Unlike shares, the securities do not give holders any say in the company.

Consumer groups accused Prokon of attracting investors with promises of possible returns of at least 6 percent a year without giving sufficient warning of the risks.

An increasing number of investors had asked for their money back, following German media reprots that questioned whether Prokon's pay-outs were backed by actual profits.

The company had said in reaction that it had a viable business model but warned last week that it might have to file for insolvency as too many investors were demanding their money back. ($1=0.7372 euros) (Reporting by Alexander Huebner; Writing by Harro ten Wolde; Editing by Greg Mahlich)

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