Qatar Solar will take 29% stake in German firm as part of restructuring plan
Shareholders of debt-laden SolarWorld have approved a wide-ranging restructuring plan, averting collapse for what was once Germany's top solar firm.
Holders of SolarWorld's two convertible bonds, worth a combined 550 million euros ($732m), had given their consent earlier this week, effectively taking a 55 percent haircut on SolarWorld's debt.
Approval by SolarWorld's shareholders was the last hurdle the group needed to push through its restructuring, under which Qatar Solar will take a 29-percent stake.
Once a top player in the global solar industry, SolarWorld in January warned that it needed to restructure its debt, suffering from falling government subsidies for solar power as well as a massive decline in prices that has led to billions of euros in losses in the sector.
During the last decade, SolarWorld was part of a group of solar companies that grew from small start-ups into global market leaders, boosted by lavish subsidies for solar power in their German home market.
At the peak of the solar boom in 2007, shares in SolarWorld traded at nearly 48 euros. The stock plunged 15 percent on Wednesday, finishing trading at 52 euro cents.
As companies ramped up production capacity due to strong demand, the global market was flooded with solar panels, leading to plunging prices, exacerbated by competitors from China.
The price plunge led many Western players, including Q-Cells, Conergy and Solon, to file for insolvency, and led to a trade war between China and Europe, which was only recently resolved.
The deal will be a boon for SolarWorld founder Frank Asbeck, nicknamed "sun king" in Germany, who has earned a reputation for unconventional business proposals, including launching a takeover bid for General Motors' unit Opel in 2008 and giving solar panels to the Vatican for free.
As part of the restructuring, Asbeck will invest 10 million euros of private funds, giving him a 19.5 percent in the company. He currently holds 27.84 percent.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.