UPDATE 1-Conergy says LG Electronics ends joint venture talks
* Korean partner stops plans to buy stake in Conergy plant
* Conergy stock plunges on news
(adds detail, CEO and spokesman comments, share price)
FRANKFURT, Nov 6 (Reuters) - South Korea's LG Electronics (066570.KS) ended talks over a possible joint venture with Conergy (CGYG.DE), the German solar energy system manufacturer said on Thursday, sending its shares tumbling.
Conergy in a statement said that due to the credit crisis and a change in LG's strategic direction, the Korean company no longer plans to acquire the majority stake in the German company's solar module plant in the eastern city of Frankfurt Oder that borders with Poland.
However, LG is continuing to review "other options for cooperation", Conergy added.
The European press department of LG Electronics could not be be reached for a comment.
"This is extremely bad news for Conergy," said an analyst who declined to be named.
In mid-September, LG and Conergy signed a non-binding preliminary deal under which LG said it would acquire a 75 percent stake in the plant, with Conergy retaining the remainder.
"Despite the decision by LG, we are pleased with regard to the Korean company's ongoing interest to further cooperate closely with Conergy," Chief Executive Dieter Ammer said in a statement.
"Besides negotiations with other parties interested in a joint venture it is also a possible scenario that the plant remains with the Conergy group," he added.
Shares in Conergy fell as much as 22.3 percent on the news, and were down 15.6 percent at 1450 GMT, the biggest underperformer on Frankfurt's technology index .TECDAX.
Conergy is currently planning to raise more than 250 million euros ($322.2 million) through a capital increase by the end of the year, but concerns persist whether it will be successful given the current market conditions.
A company spokesman said that the failed negotiations will not have an effect on the planned capital increase.
"We have planned the capital increase regardless of the negotiations," he said.
(Reporting by Christoph Steitz; Editing by Mike Nesbit)
