FRANKFURT Germany's SolarWorld SWVG.DE has secured backing for a wide-ranging restructuring plan from holders of one of its outstanding convertible bonds, a key step in the solar group's overhaul.
SolarWorld had to embark on a debt restructuring to cope with the pressures of overcapacity in the solar industry, where falling prices and tough Asian competition have pushed some big players such as Q-Cells QCEG.UL and Solon (SOOG.MU), to file for insolvency.
Companies in the Germany, the world's largest single solar market, have been particularly hard hit by Chinese rivals.
At a creditors meeting on Monday, SolarWorld said 99.96 percent of holders of a 150 million euro ($199 million) convertible bond agreed to the restructuring measures, basically accepting a "haircut" of 55 percent.
Some of SolarWorld's biggest bondholders include investment firms GFC Advisers LLC, Do Investment AG and PEH Wertpapier AG (PEHG.F), according to Thomson Reuters data.
SolarWorld, once Germany's largest solar power group, now needs the approval of holders of a second 400 million euro convertible bond on August 6 as well as that of shareholders at an extraordinary meeting on August 7.
Under SolarWorld's debt restructuring deal, Qatar Solar will invest 35 million euros in SolarWorld, becoming a 29-percent shareholder in the group, while existing shareholders will end up with 5 percent.
Qatar Solar is owned by the Qatar Foundation and owns 70 percent in Qatar Solar Technologies (QSTec), a joint venture with SolarWorld, which owns 29 percent.
As part of the deal, SolarWorld Chief Executive Frank Asbeck will invest 10 million euros of private funds, giving him a 19.5 percent stake. He currently owns 27.84 percent.
(Reporting by Christoph Steitz. Editing by Jane Merriman)