UPDATE 3-Germany's Solar Millennium files for insolvency
* Second German solar insolvency this month
* Could not finalize deals to sell projects in U.S., Spain
* Shares suspended from trade
(Adds comments from solarhybrid executive)
FRANKFURT/LOS ANGELES, Dec 21 (Reuters) - Solar Millennium AG S2MG.DE became the second German solar company to file for insolvency this month, as the company ran out of cash before it was able to finalize deals to sell large projects in the United States and Spain.
It still expects, however, to complete a transaction to sell its biggest U.S. projects to German developer solarhybrid AG SHLG.DE early next year.
Before shares in Solar Millennium were suspended on Wednesday, they had lost 9.3 percent, and the news also weighed on other German solar stocks, including Solarworld AG SWVG.DE and Q-Cells QCEG.DE.
German solar module maker Solon SE SOOG.DE filed for insolvency on Dec. 13. [ID:nL6E7NE0ZM]
In a statement, Solar Millennium said it has not been able to close partnership deals for both its U.S. project pipeline and the Ibersol solar thermal project in southern Spain.
"Both transactions would have generated funds beyond the current need for liquidity which would have laid the foundation for a further development of the Company," Solar Millennium said.
Solar Millennium's move came a day after the Erlangen-based company said a plan to sell its U.S. project pipeline to developer solarhybrid would not be completed by the end of the year, as it had expected. It said, however, that both companies were committed to carrying out the transaction.
The company said the delay stemmed from solarhybrid's need for "more time for internal coordination and negotiation in the U.S."
solarhybrid Chief Financial Officer Albert Klein said the acquisition discussions were "quite advanced," but added that the company would acquire 1.75 gigawatts of projects rather than the 2.25 GW pipeline it originally planned.
solarhybrid must make sure that the projects, which were approved by regulators to use solar thermal technology, can be converted to use photovoltaic solar panels, Klein said.
The deal will be finalized at the earliest next month, he added, though the insolvency application means Solar Millennium's major management decisions will have to approved by an insolvency administrator in Germany.
"So there will probably be some sort of other delay," Klein said.
Last month, solarhybrid said it planned to use First Solar Inc (FSLR.O) in the Solar Millennium projects, and would involve the U.S. panel maker as a partner in the deal.
Discussions with First Solar to supply the panels are ongoing, Klein said.
A First Solar spokesman had no comment.
Solar Millennium said it had been in advanced negotiations about the sale of its U.S. pipeline since September.
The 1.75 gigawatt pipeline includes the massive 1 GW Blythe project that is expected one day to be the world's largest solar power plant.
Blythe is being developed by Solar Millennium's U.S. arm, Solar Trust of America.
A Solar Trust of America spokesman said the company was optimistic that the deal with solarhybrid would be finalized and that the projects would proceed as planned.
Earlier this year, Solar Millennium said the Blythe project would switch to using photovoltaic technology instead of solar thermal power because of the dramatic drop in the price of solar panels.
The Blythe project had been offered a conditional loan guarantee from the U.S. Department of Energy, but Solar Millennium decided to finance the project in the commercial bank market after it switched to a more ubiquitous technology.
Solar Millennium, which is not listed in any of the major German stock indices, has a market capitalization of about 14 million euros ($18.4 million).
($1 = 0.7628 euros)
(Reporting by Christoph Steitz in Frankfurt and Nichola Groom in Los Angeles; Editing by Helen Massy-Beresford and Matthew Lewis)
((email@example.com)(+49 69 7565 1269)(Reuters Messaging: firstname.lastname@example.org)) Keywords: SOLARMILLENNIUM/INSOLVENCY
(C) Reuters 2011 All rights reserved. Republication or redistribution of Reuters content, including by caching, framing, or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
- Tweet this
- Share this
- Digg this
- Deadly gun attack in eastern Ukraine shakes fragile Geneva accord |
- South Korea recovers first bodies from inside sunken ferry |
- Special Report - How the U.S. made its Putin problem worse
- Bankrupt British loans official resigns, embarrassing PM Cameron
- Australia sees 'regroup' on Malaysian plane search in a few days |