German solar group Conergy has filed for insolvency, putting some 800 jobs at risk and becoming the latest casualty in an industry battered by overcapacity, plunging prices and a trade dispute between Europe and China.
Once Europe’s largest solar company, Conergy has been fighting for months to secure fresh investment and a deal with its creditors, and earlier this week it had looked close to an agreement.
However yesterday it ran out of time, saying it had not been able to win over one of its 10 creditors and that two of its subsidiaries were insolvent, essentially meaning they had run out of money.
A district court will now appoint an administrator, who will try to rescue the business.
"This is a clear sign of how huge the crisis was and still is," said Holger Fechner, analyst at NordLB bank.
Four people familiar with the matter said EAA, a so-called "bad bank" tasked with taking care of toxic assets from wound-down public-sector lender WestLB, was the creditor that opposed Conergy's proposed restructuring deal. EAA and Conergy declined to comment.
Rising demand and government subsidies for renewable energy stoked a boom for solar power last decade that turned small start-ups into global giants almost overnight. And while the demand is still there, some of the subsidies are not as cash-strapped governments cut back.
The industry also attracted a wave of new entrants that sent prices plunging.
China in particular ramped up production and exports of solar panels and related products, sparking a trade dispute that has seen the EU slap duties on Chinese imports and Beijing respond with an inquiry into imports of European wine.
Yesterday there were signs tensions might be thawing, with people familiar with the matter saying China and the EU were moving towards a deal to defuse the conflict.– Reuters