Shareholders of Germany's largest solar company, Solarworld, have agreed to a debt restructuring and recapitalization plan. It's aimed to make the struggling company profitable again amid fierce competition.
At a marathon meeting on Wednesday, Solarworld's shareholders finally gave their backing to a management restructuring scheme meant to keep the ailing firm's insolvency at arm's length.
But it was anything but a light-hearted decision. Investors in essence agreed to lose 95 percent of their shares, with only one per every 150 shares remaining in their possession. Moreover, they'll be barred from obtaining new shares to be issued in a recapitalization bid.
Those shares will only be available for Solarworld's creditors. CEO Frank Asbeck is to contribute 10 million euros ($13.3 million) from his private funds to keep the company afloat. The move will also help him get hold of a 20-percent stake in the company.
Solarworld currently has a workforce of 2,600 in Germany and the US, down from 3,500. The firm has been suffering from global overcapacity in the solar panel sector and price pressures created mainly by Chinese competitors.
Solarworld confirmed Qatar Solar was to invest 35 million euros to become the firm's largest individual shareholder with a 29-percent stake.
Analysts had their misgivings about Solarworld's ability to wriggle out of its current plight despite the planned debt restructuring. But CEO Frank Asbeck appeared full of optimism at the shareholder meeting.
He said the company would definitely have a future and would be compatible enough to Asian challenges successfully. "What we'll be seeing is a race for technological innovation," Asbeck told shareholders. "And we're prepared for this."
hg/rc (dpa, Reuters)