UPDATE 1-Solon may post impairment loss, shares drop
* Impairment loss could total 40 mln eur
* Affiliate SilPro was unable to find further funding-Solon
* Solon shares drop 9.3 percent
(adds background, details, share price, analyst quote)
FRANKFURT, April 8 (Reuters) - Shares in German module maker Solon (SOOG.DE) plummeted on Wednesday after the company said it could post an impairment loss of 40 million euros ($52.76 million) due to funding problems at an affiliated French company.
French Silicium de Provence (SilPro), in which Solon has an indirect investment, was "unable to find further funding due to the current financial crisis, resulting in the necessity of this measure," Solon had said in a statement issued late on Tuesday.
At 0805 GMT, shares in Solon were down 10.9 percent at 9.48 euros as one of the biggest decliners in Germany's stocks universe .PG.DE, recovering from an earlier decline of up to 23 percent, while the German technology index <.TECDAX) was down 1.2 percent.
Solon said that a French court ordered the filing for placement under administration for polysilicon producer SilPro, a procedure similar to Chapter 11 in the United States.
"The potential writedown is another very negative piece of news, as the current equity ratio is lowered from 41 percent to 37 percent," Sven Kuerten, analyst at DZ Bank wrote in a note.
Solon is impacted via its 48 percent stake in SOL Holding -- a joint venture with Dutch Econcern. The joint venture holds a 70 percent stake in SilPro.
Other shareholder in SilPro include Photon Power Industries (PPI), holding 30 percent, and EDF Energies Nouvelles (EEN.PA), holding an indirect stake of 12.8 percent via PPI.
The financial crisis has thrown the once-booming solar sector into a crisis, with prices for cells and modules falling significantly, hitting giants such as Q-Cells (QCEG.DE) and U.S.-listed Suntech Power Holdings (STP.N). [ID:nLP303187] [ID:nN17389774]
"(The) news should lead to a significant correction after recent rally," a Frankfurt-based trader said.
Solon shares have lost 32.8 percent since the beginning of the year, but are up 14.6 percent since mid-March.
(Reporting by Christoph Steitz)
