May 10, 2017 / 6:25 PM / 2 months ago

German Sun King's SolarWorld to file for insolvency

FILE PHOTO: Frank Asbeck, founder and CEO of Germany's SolarWorld reacts before an extraordinary shareholders meeting at the former German lower house of parliament Bundestag in Bonn, August 7, 2013.Wolfgang Rattay/File Photo

FRANKFURT (Reuters) - Germany's SolarWorld, once Europe's biggest solar power equipment group, said on Wednesday it would file for insolvency, overwhelmed by Chinese rivals who had long been a thorn in the side of founder and CEO Frank Asbeck, once known as "the Sun King".

SolarWorld was one of the few German solar power companies to survive a major crisis at the turn of the decade, caused by a glut in production of panels that led prices to fall and peers to collapse, including Q-Cells, Solon and Conergy.

SolarWorld was forced to restructure and avoided insolvency thanks to a debt-for-equity swap and the support of Qatar, which took a 29 percent stake in the group four years ago through Qatar Solar S.P.C.

A renewed wave of cheap Chinese exports, caused by reduced ambitions in China to expand solar power generation, was too much to bear for the group, which made its last net profit in 2014.

"Due to the ongoing price erosion and the development of the business, the company no longer has a positive going concern prognosis, is therefore over-indebted and thus obliged to file for insolvency proceedings," SolarWorld said in a statement on Wednesday.

Frankfurt-listed shares in the group last traded down 77 percent at 0.81 euros.

SolarWorld, which earlier this year announced staff cuts after reporting increased losses, said it would immediately file for insolvency and that it was assessing whether affiliated companies would also have to do the same.

Asbeck, 57, still holds a 20.85 percent in the group which he founded in 1998 and within 10 years had grown to be one of the world's three biggest solar power companies.

Known as the Sun King for his success and brashness, Asbeck famously bid for German carmaker Opel in 2008 and was also later instrumental in drumming up support against what he saw as unfair Chinese competition.

"SolarWorld has led the fight against illegal price dumping in the United States and Europe. This dumping has further intensified, however," Asbeck said in a statement on Wednesday. "This is a bitter step for SolarWorld, the management board and staff and also for the solar industry in Germany."

Germany used to be the world's biggest market for solar panels, with demand driven by generous government support that provided business for panel makers around the world, including Asia and the United States.

Through the group's U.S. unit Asbeck pushed for import tariffs on Chinese panels, arguing that low labour costs and local government support gave his Chinese rivals an unfair advantage.

Additional reporting by Arno Schuetze and Anneli Palmen; Editing by Greg Mahlich

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