The 3 month protective phase means the company is largely protected from creditors' enforcements and sanctions, and can remain fully operational

Centrotherm photovoltaics AG has submitted an application to the District Court of Ulm to launch insolvency protection proceedings (pursuant to the German Act Relating to the Further Simplification of the Reorganisation of Companies [ESUG], and Section 270b of the German Insolvency Directive [InsO]).

The firm has also applied to open insolvency proceedings under its own administration in connection with the application mentioned above.

With the help of these proceedings, the company aims to consistently pursue the reorganisation path that it has already adopted.

The application includes the subsidiaries centrotherm thermal solutions GmbH & Co. KG and centrotherm SiTec GmbH. The activities of the companies centrotherm management services GmbH & Co. KG and centrotherm cell & module GmbH are to be prospectively bundled within the parent company as part of the reorganisation. All other subsidiaries both in Germany and abroad will continue to operate as previously, and will not participate in the insolvency protection proceedings.

The German Act Relating to ESUG came into force on March 1st 2012, and provides protection to companies in insolvency proceedings. It allows companies to restructure themselves based on a coordinated reorganisation and future concept. During the "protective" phase, which is limited to three months, the company is largely protected from creditors' enforcements and sanctions, and can remain fully operational.

The Management and Supervisory boards of centrotherm photovoltaics AG are convinced that this step is the best option in the company's current difficult situation to successfully conclude the Group's reorganisation (which has already started), in the interests of employees, customers, suppliers, shareholders and creditors, and to thereby secure the Group as a going concern.

To support these moves, the Supervisory Board of centrotherm photovoltaics AG has appointed reorganisation expert Tobias Hoefer to the Management Board with effect as of July 11th, 2012. Tobias Hoefer, a specialist insolvency lawyer, specialises in highly complex corporate reorganisations. His most notable reorganisations include internationally operating groups AKsys and Robert Sihn (automotive supply companies), ATS (rim manufacturer), and NDT Systems & Services (ultrasound testing systems).

"Given the insolvency protection proceedings, I see my new role as being a moderator of the interests of all parties involved in the proceedings. The joint objective of all these parties must be to maintain centrotherm as a company despite the serious market slump, and to lead it to a successful future. All will benefit if we succeed in this endeavour. The insolvency protection proceedings offer the best opportunities to achieve this, and I believe that my more than 15 years of experience as a corporate reorganiser, and as an insolvency administrator, can be of use in the necessary settlement of interests," Tobias Hoefer points out.

Business operations at centrotherm photovoltaics AG and the other Group companies are currently continuing as usual. "Our customers continue to receive the same first-class quality engineering and services, technology and products from centrotherm to which they are accustomed," adds the SIGS firm CEO, Robert M. Hartung.

"The protection provided by the ESUG creates the necessary scope to realise a balanced and sustainable future concept that lies in the interests of all participants in the proceedings. At the same time, centrotherm photovoltaics AG continues to be able to manage its operations itself. Since we remain solvent, we can both process customer orders to schedule, and also pay our suppliers," adds Hartung.

Liabilities that were originated before the application for the insolvency protection proceedings was filed cannot be satisfied during the protection proceedings, however. They are nevertheless to be satisfied as best as possible as part of the reorganisation concept coordinated with creditors.

 

Core elements of the reorganisation of the centrotherm photovoltaics Group

Concentration on technological strengths and core business areas, such as mechanical engineering for the energy and high-tech industry areas, are to form the cornerstones of the future concept which is to be elaborated further over the coming weeks. "We were, and are, world market leaders in thermal equipment and related technologies. We must, and will, invest further in this expertise, in order to maintain our technological and competitive league," Robert M. Hartung makes clear.

He goes on to note that, with its products, centrotherm can be a technology and efficiency motor for the global energy revolution, and realise so-called grid parity, in other words, make photovoltaic electricity competitive with conventional energy sources.

For this reason, centrotherm photovoltaics is experiencing high demand, particularly on new markets such as the MENA region (Middle East and North Africa). He commented that this development offers great potentials for the future. By contrast with its previous approach, the company would nevertheless now contribute only its expertise and products as a technology partner in major projects when tapping such potentials, in order to thereby limit risks, according to Hartung.

Further capacity adjustments and cost reductions are required, however, given the slump in the solar industry over recent months, and the resultant decline in orders and sales. "We require further structural adjustments in order to secure our company's continued existence in the future. This will allow us to maintain centrotherm's competitiveness in a difficult market situation," emphasises Jan von Schuckmann, Management Board member responsible for restructuring. "In parallel, we will continue to invest in research & development, and extend our extraordinary market position."