With preliminary Q3 results falling short of expectations, Centrosolar Group AG, its 100% subsidiary Centrosolar AG and its 100% subsidiary Centrosolar Sonnenstromfabrik GmbH announced to have applied to reorganise Centrosolar Group under protective shield proceedings pursuant to the Insolvency Code (InsO). This would enable Centrosolar to retain control.
Munich-based Centrosolar Group reports to mainly consist of Centrosolar AG, which sells solar modules and complete systems mainly to private households, Centroplan GmbH, a project developer of solar installations on commercial properties and Renusol GmbH, which develops and sells PV mounting systems.
Like other German solar companies Centrosolar Group is suffering from over-capacities and international competition. Despite ongoing restructuring efforts that included a capital reduction and job cuts, the recovery takes longer than expected, Centrosolar commented on its move.
According to provisional calculations Centrosolar’s revenue in Q3 was down 40% year-on-year, amounting to EUR 27.5 million (Q3 2012: EUR 46.1 million), falling short of the expectations on which the restructuring plan was based. For the first nine months the provisional revenue totalled EUR 85.0 million (previous year: EUR 145.0 million). According to initial calculations third-quarter EBITDA came to EUR -4.4 million (previous year EUR -3.1 million), totalling EUR -18.2 million for the first nine months (previous year EUR -7.0 million).
The protective shield procedure is a special form of the so-called “debtor-in-possession management” or “self-administration proceedings” (Eigenverwaltung). Contrary to “standard” insolvency proceedings, the management of the debtor retains control of the company. The management is given a certain period of time to be determined by the court (however not longer than three months) to prepare an insolvency plan under the supervision of a so-called trustee or insolvency monitor (Sachwalter) who is appointed by the competent court upon proposal by the debtor. An insolvency plan under the protective shield procedure is a plan to reorganize the debtor with the aim to avoid insolvency or overcome over-indebtedness and at some point in the future release it from the protective shield into the open market again.