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Germany's centrotherm photovoltaics has announced details of its insolvency plans, although it still requires the approval of its creditors and the Ulm Insolvency Court.
Under the draft insolvency plan, the company is to be continued along with its stock market listing, and the company's capital structure is to be reorganized so that unsecured creditors' receivables are transferred to the company in exchange for stock. This is intended to create a settlement of interests between the shareholders and the company in the company's continued existence and capital market access and of the creditors' interest in the best possible satisfaction of their receivables.
The company's share capital, which currently amounts to €21,162,382, and is divided into an equal number of ordinary bearer shares, is to be reduced – following the withdrawal of two shares provided free of charge – by €16,929,904 to €4,232,476 (capital write-down) by consolidating the remaining 21,162,382 shares in a five to one ratio.
In a directly subsequent step, the share capital is to be increased again by €16,929,904 to €21,162,380 by way of a capital increase against non-cash capital contributions (debt-for-equity swap).
To this end, the company's unsecured creditors are to assign 70% of their unconditional and unrestricted receivables to an administration company, which will subscribe for the total of 16,929,904 new shares as part of the debt-for-equity swap. Payment of the remaining 30% of the receivables will be deferred until the end of 2015 on a non-interest-bearing basis.
This administration company will hold 80% of the company's share capital and shares after the implementation of the restructuring. The creditors will not participate directly as shareholders in the company, but can participate indirectly in the company's profitability and value enhancement, in other words, in the proceeds which are generated in a later disposal of the new shares.
According to current planning, a turnaround is anticipated for 2014 given the successful implementation of the planned restructuring of the company and the significant growth in the market for production technology for the PV industry which is expected for 2014. On the basis of the positive market trend which is assumed for 2014, the company is budgeting negative EBITDA of almost €18 million for 2013, with a net loss for the year of €24 million. For 2014 and 2015, the company is planning positive EBITDA of €37 million in each year and net a income of €22 million and €23 million respectively.