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Germany's SAG Solarstrom to file for insolvency

FRANKFURT, Dec 13 (Reuters) - SAG Solarstrom AG said it would file for insolvency, becoming the latest casualty of a solar industry crisis that has claimed many of its peers over the last two years.

The small German company, which builds and operates solar power plants, on Friday said talks with banks and creditors over refinancing the business had broken down.

As a result it would make no interest payment on Dec. 16 for its 2010/2015 bond.

Shares in the company tumbled and at 1058 GMT were down 66 percent at 0.36 euros.

Western solar companies have been under intense pressure from plunging prices for solar panels and cells, which convert sunlight into electricity, caused by a global glut of the equipment.

A large group of former sector heavyweights, including Q-Cells, Solon and Conergy have filed for insolvency in the last two years and have subsequently been broken up and parts of the businesses sold.

Solarstrom said it would apply to run the insolvency process itself, rather than have a court-appointed administrator - a process allowed under German law.

The company, which employs about 200 people, said it had been in refinancing talks since mid-November, following delayed cash inflows.

SAG Solarstrom was founded in 1998 and went public a year later. It made earnings before interest and tax (EBIT) of 8.9 million euros ($12.24 million) in 2012 on sales of 188.6 million. ($1 = 0.7271 euros)

Reporting by Christoph Steitz; Editing by Erica Billingham

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