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UPDATE 3-Solar crisis triggers Q-Cells debt restructuring
January 24, 2012 / 8:01 AM / 6 years ago

UPDATE 3-Solar crisis triggers Q-Cells debt restructuring

* Debt-to-equity swaps planned for bonds due 2014, 2015

* Says will be able to continue as an independent group

* Q-Cells shares fall 19 pct

By Christoph Steitz

FRANKFURT, Jan 24 (Reuters) - Q-Cells said it would restructure two convertible bonds and is trying to agree a partial repayment of a third, as the German solar company struggles to secure financing following a sector shakeout that has forced some rivals out of business.

Solar companies in Europe and the United States have been hit hard by a toxic mix of oversupply, falling prices, low-cost Asian competition and lower government subsidies on which the industry still depends.

“(However), an insolvency is currently not under discussion,” Q-Cells Chief Executive Nedim Cen told reporters during a conference call on Tuesday.

Q-Cells, once the world’s No.1 maker of solar cells, said it planned a debt-to-equity swap for two of its convertible bonds, due in 2014 and 2015, respectively.

A similar move had caused German peer Conergy to fall into the arms of hedge funds in late 2010, but a source close to the debt talks said no hedge funds had so far shown interest in Q-Cells.

The company expects to return to profitability on an operating level by 2014 at the earliest, but Cen did not provide any concrete details on how he expected market conditions to improve in the future.

“We believe the industry will return to a rational behaviour,” he said. “We have to assume this.”


Q-Cells said it also aimed to come to an agreement with the holders of another convertible bond due at the end of February for a partial repayment of the outstanding volume in tranches over time.

“The financial situation is becoming more and more dramatic,” DZ Bank analyst Sven Kuerten said, keeping a “sell” rating on the stock.

“Details on the financial restructuring are not released yet but a debt/equity swap should be negative for the shareholders in our view,” he added.

Q-Cells -- whose shares were down 19 percent by 1133 GMT, hitting the lowest level in the company’s history -- said the restructuring measures would enable it to continue operating as an independent group.

“We have designed our business plans under that assumption,” Q-Cells’ Cen said.

The solar industry’s problems have already triggered a wave of bankruptcies in the United States, most notably panel maker Solyndra LLC and Evergreen Solar.

In December, Solon and Solar Millennium, two German solar companies, filed for insolvency.

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