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© solarworld Business | July 21, 2017

Solarworld: Significant staff reductions needed

The preliminary insolvency administrator of SolarWorld AG, attorney at law, Horst Piepenburg, has given details about the current situation regarding preliminary insolvency proceedings.
During preliminary insolvency proceedings, the company not only processed and sold existing inventory goods, but was also able to generate new business opportunities in the low double-digit million range. This allowed production lines at the manufacturing sites to maintain operations in a three-shift system.

However, due to high production costs, it was not possible to generate enough liquid funds during the eight weeks of preliminary insolvency proceedings to cover personnel costs for the current 1'850 employees after the period of insolvency benefit payments expires on August 1, 2017.

At the same time, interested investors, who are involved in the due diligence process, have signalized that they would still need up to four months to complete their audit: The legal relationships are complex and the potential future scenarios presented have to be thoroughly analyzed and calculated. Currently, various interested strategical investors are examining the competitiveness of the company.

“Thus, we are in the midst of a conflict area between rescue prospects and new perspectives on the one hand, and current material, structure and personnel costs, which we are not able to fully compensate for, on the other,” explained the preliminary insolvency administrator. Considering the order intake and the global challenges of the solar industry, the insolvent companies will have to reduce personnel costs significantly after July 31, 2017, and lay off employees. Neither the Federal Government, nor the federal states or Brussels have funding pools available to compensate the expected deficit in the upcoming months.

However, the preliminary insolvency administration said that it will continue to pursue all available options until the beginning of August 2017.

“Our goal is and remains to continue business operations of the insolvent companies after start of insolvency proceedings in the interest of potential investors and in agreement with the debtors, with a reduced staff and taking into account the conditions of a running production and the continued use of production lines,” explained Piepenburg.

Commissions for contractual work as toll manufacturer are currently being thoroughly analyzed and calculated. For this reasons, necessary layoffs cannot be decided until the week before the start of insolvency proceedings.

Finally, the preliminary insolvency administrator emphasized that he would do everything in his power to continue production at the manufacturing sites in order to preserve the insight, know-how, skills and abilities as well as the innovation capabilities of SolarWorld: “Thus, we will be able to maintain a ground for the further bidding process and the successful sale of assets in the interest of the debtors as well as safeguard the perspectives of photovoltaics in Germany.”

Due to staff reduction plans that had already been started, the insolvent companies of the SolarWorld group are currently employing less than 1'850 employees (at the time of the insolvency application on May 11, 2017, staff amounted to almost 2'200).

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October 16 2017 2:56 PM V8.8.6-2