* Says credit insurers no longer insuring deliveries
* Cites weak market, resulting financing problems
* Says can no longer use open credit lines
* Says sees low double-digit mln eur hit to liquidity
* Shares down over 30 percent
(Adds further details on Centrotherm, German market)
By Maria Sheahan and Christoph Steitz
FRANKFURT, June 14 The crisis surrounding the
German solar power industry deepened on Thursday with equipment
maker Centrotherm saying it could no longer use
existing credit lines and was talking to its banks, a day after
smaller peer SolarWatt filed for insolvency.
Shares in Centrotherm, the world's second-biggest maker of
production equipment for solar panels and photovoltaic cells,
fell as much as 40 percent to an all-time low of 3.08 euros per
share, a far cry from the record high of 69.68 euros per share
reached in November 2007.
At 0900 GMT the shares were down 30 percent on the previous
day at 3.60 euros.
"Until further notice, open credit and guarantee lines can
no longer be utilised given current financing discussions with
banks," the company said late on Wednesday, adding it sees a hit
to its liquidity in the low tens of millions of euros.
Centrotherm also said that trade credit insurers would no
longer cover its shipments, blaming a poor market environment
and the resulting strained financing.
"Due to the extreme uncertainty on the financing side, we
have decided to put our rating (on Centrotherm shares) and price
target 'under review'," LBBW equity analyst Erkan Aycicek said.
The German solar power equipment industry has come under
intense pressure due to fierce competition from Asian rivals,
overcapacity and cuts in government subsidies for solar power
generators, driving some players out of business, including
former German heavyweights Solon and Q-Cells
On Wednesday module maker SolarWatt filed for insolvency.
Lavish power generation subsidies made Germany the world's
largest market for solar power, but soaring costs have led the
German government to radically slash so-called feed-in tariffs,
which the industry needs as long as solar power is more
expensive to produce than conventional forms of energy such as
coal and gas.
Last month Centrotherm reported its first-quarter sales more
than halved, causing an operating loss of 43 million euros ($54
The company, which made more than 90 percent of its 2011
sales in Asia, said it has now appointed a consultancy to
prepare a reorganisation plan that will be the basis for further
talks with banks to secure the group's financing.
($1 = 0.7953 euros)
(Editing by Greg Mahlich)