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FRANKFURT, Jan 17 (Reuters) - German wind park operator Prokon said it had to stop interest payments and would not for now redeem the millions of euros worth of so-called profit-sharing certificates sold to mainly retail investors, as too many were demanding their money back.
"In the current situation we are unable to make repayments or interest payouts," the group's managing director Carsten Rodbertus said in a statement on the group's website on Friday, addressing its 75,000 certificate holders.
"Any payments could be and would be claimed back by an administrator in case of insolvency proceedings anyway," he added.
The company, which had raised some 1.4 billion euros ($1.9 billion) by selling the profit-participation certificates, said via its website it would not respond to media questions following the statement.
The company had won mainly retail investors through TV advertising campaigns on German prime-time television, but last week warned it may have to file for insolvency if it was unable to strike a deal with investors.
It had drawn criticism from consumer advocate groups for luring investors with promises of possible returns of at least 6 percent, without sufficiently warning of the risks.
More and more investors have requested their money back following several reports in German media that have questioned whether Prokon's payouts are backed by actual profits. The company has maintained it has a viable business model.
The company added that to avert insolvency, at least 95 percent of investors' capital would have to remain with the company until the end of October, urging investors not to cancel their securities.
Financial reports posted by Prokon on its website showed that as of October 2013, it had paid out 330 million euros in interest, even though it had made a loss of 210 million euros ($287 million).
Profit-participation certificates offer high coupon 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.
Prokon operates 50 wind parks in Germany and Poland and employs roughly 1,300 staff. ($1 = 0.7352 euros) (Editing by David Holmes)