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Blaubeuren, Germany-based Centrotherm has filed for Chapter 11-type bankruptcy protection in Ulm’s district court to start insolvency proceedings. Centrotherm has a three-month window to restructure before creditors come knocking on its door. The company named insolvency lawyer Tobias Hoefer to the board in a bid to oversee the restructuring. Last month, Hans Autenrieth, member of the management board and co-CEO stepped down from his board position. Jan von Schuckmann replaced him and was appointed chief restructuring officer.
Restructuring would take the form of bundling Centrotherm Management Services and Centrotherm Cell & Module within the parent company. All other subsidiaries are expected to continue operating, unaffected by these proceedings.
Schuckmann stated that, Centrotherm will have to cut costs and adjust capacity “to secure our company’s continued existence in the future. This will allow us to maintain Centrotherm’s competitiveness in a difficult market situation.”
Centrotherm “continues to be able to manage its operations itself,” chief executive officer Robert Hartung said in a separate statement. “Since we remain solvent, we can both process customer orders to schedule, and also pay our suppliers.”
According to Bloomberg, Centrotherm’s insurers stopped covering merchandise deliveries last month and banks closed its credit and guarantee lines. The company May reported a €42.9 million (US$53 million) loss in May, before interest and tax in the first three months of 2012 and said it sees no improvement in the first half.
Centrotherm plummeted as much as 81% in Frankfurt today to its lowest level since it started trading in October 2007.
Following yesterday’s report, centrotherm has released a statement dictating that the District Court of Ulm has approved the application the company submitted to initiate insolvency protection.
This ruling allows the company to proceed with its administration’s reorganization plans to contract insolvency liabilities. As a consequence, the prerequisites have been created to allow suppliers and customers to continue their business relationships with the centrotherm Group.