Conergy Is Making a New Financial Start

Conergy is making a new financial start: The solar energy company’s creditors have reached an agreement with the company to reduce the company’s debt substantially, with some creditors providing equity capital. The refinancing package that has now been signed will reduce Conergy’s debt by € 188 million, markedly lowering the company’s future interest burden. The remaining € 135 million credit facility has been extended by another four years at market terms. Financial covenants only apply after three years.

Conergy’s CFO, Dr. Sebastian Biedenkopf, said, “This agreement paves the way for a fresh start and secures Conergy’s long-term financial viability. A new Conergy will emerge from this balance-sheet restructuring. ”

Under the refinancing concept, the capital stock will initially be reduced from just under € 400 million to about € 50 million. The company will then conduct a capital increase of up to € 188 million with subscription rights for Conergy shareholders. If these subscription rights are exercised, Conergy will use the proceeds to reduce the existing lines of credit by the corresponding amount.

If the subscription rights are not exercised, several creditors have pledged to contribute their loan receivables from Conergy as a non-cash contribution up to a nominal amount of € 188 million, which for this purpose should be set at 60% of their nominal value, in exchange for shares. In both cases, Conergy’s debt will be reduced. These measures will be decided at an extraordinary general meeting scheduled for the start of 2011. They will enable the credit facility to be reduced to € 135 million from the current € 323 million. The new credit lines with a term of four years will be provided by the remaining members of the existing banking consortium.

The implementation of this refinancing package is subject to a number of standard terms and conditions, such as the provision of binding information by the responsible financial authorities and municipalities, the receipt of expert opinions on the restructuring and the non-cash contribution as well as a partial reduction of the existing guarantee lines.

Dr. Biedenkopf added, “With this solution, we have reached a compromise that we believe adequately addresses the interests of all parties involved. I am particularly grateful to the banks for their willingness to initiate this debt reduction based on their confidence in the company’s future viability and thus to make the fresh start possible. We can now fully focus on our core business again.”

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