Centrosolar unveils restructuring plan

German PV group Centrosolar has unveiled a restructuring package aimed at bringing its debt load back to a sustainable level, in a sign that the PV industry’s consolidation phase still has room to run.

At the centre of the plan is a proposal to convert a €50m ($67m) bond placed in early 2011 with a 7% coupon into shares in the Munich-listed company, while “significantly streamlining” several business areas, including sales and administration.

Senior management will also be “deferring” a significant portion of their remuneration to help the company reach solid ground. Alexander Kirsch has been chief executive and chief financial officer of Centrosolar since 2005.

The company says it will cut its German production of glass, which is used both in-house for module production and sold to other module manufacturers. Centrosolar also maintains a glass factory in China.

However, the company did not indicate that any cuts are in store for its 350MW module line in Wismar, Germany.

Centrosolar has financial liabilities of some €90m but cash and cash equivalents on its balance sheet of less than €26m. The company’s market capitalisation has fallen precipitously over the past five years, and currently stands at just €21.4m.

Centrosolar says its banks and other creditors are supportive of its bond conversion plans and “are themselves prepared to contribute towards the reconstruction” of the company’s balance sheet. Shares not taken up by existing shareholders will be opened up to new investors.

German peer SolarWorld is also locked in discussions with banks and bondholders over its own debt-relief programme, and may postpone its annual financial press conference scheduled for 21 March. SolarWorld has debt of some €1bn.

In addition to supplying modules, tracking systems, inverters and solar glass, Centrosolar is a significant system integrator, focused on the small rooftop segment, and increasingly present in the US. Due to previously announced strategic shifts, the company currently derives less than one-quarter of its revenue from Germany.

Centrosolar anticipates reporting full-year 2012 revenue of €228m, compared to €293m in 2011. While its sales volume remained roughly static, it was hurt by the falling price of PV modules around the globe.

The company will report its full-year figures on 28 March.