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Clock ticking for buyer-less Aleo

The light at the end of the tunnel is rapidly growing dimmer for Aleo Solar, which admits that the potential buyer most interested in buying it walked away from the bargaining table last month.

Germany’s Aleo blames the disintegration of talks on the “increasingly challenging” European market, saying that it has resumed discussions with “other potential buyers”.

The latest failure means that takeover talks are likely to drag on until at least early 2014 – dangerously close to Aleo’s funding cut-off date next March.

This spring Bosch, a giant within Germany’s automotive sector, said it would exit the c-Si PV sector altogether, abandoning plans to establish a factory in Malaysia. Bosch promised to fund Aleo for one year, during which time it needed to find a new owner.

But the decline in the importance of the EU solar market – upon which Aleo remains utterly reliant – has greatly diminished the company’s allure, particularly given the provisional resolution of the EU-China solar spat, which will allow Chinese module suppliers to continue their domination of the EU market.

Aleo acknowledges that it is open to the idea of breaking itself up and selling off the resulting pieces.

“Whether or not there will be a transaction [at all] is currently uncertain,” the company says.

Aleo today acknowledged that another dismal set of quarterly results is in the offing.

Revenues through the first three quarters of the year are expected at €99.1m ($132.8m) – compared to €222.4m during the same period last year.

Aleo’s operating loss shrank from €51.5m to €38m, but that is merely a reflection of the fact that the company is losing money on each module that it sells – and shipments through the first three quarters fell from 258MW last year to just 113MW.

That means that Aleo – which operates 280MW of high-quality module capacity at its factory in Prenzlau, northeast Germany – is running far below its capacity during a year which is expected to be a record for global PV additions.

The nub of Aleo’s problem has been its inability to expand sales significantly beyond its core European markets.

Despite the fact that the German PV market has shrunk by nearly 60% this year, the share of Aleo’s revenues coming from its domestic market has held remarkably steady.

In September cash-strapped Aleo announced it would shutter its US subsidiary, which it previously claimed represented its most obvious path towards sales growth.

Alongside SolarWorld, Aleo is one of the last remaining German module makers, since Conergy went bankrupt earlier this year and jettisoned its manufacturing divisions before being acquired by US investor Kawa Capital.

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