German solar group Sunways to file for insolvency

German solar group Sunways AG today said it would file for insolvency proceedings on the basis of a viable restructuring plan in consultation with its creditors.

Sunways, majority owned by Chinese solar company LDK Solar Co Ltd, said that the insolvency procedure allows it to continue as a listed company, and added that it is already in talks with potential investors and will continue the talks regardless of its filing for insolvency.

The insolvency proceedings include Sunways AG with headquarters in Constance and its wholly-owned subsidiary, Sunways Production GmbH, located in Arnstadt.

In 2011, LDK, China's second-largest panel maker, which had a long-term wafer supply contract with Sunways, acquired a majority stake in the German solar company.

Sunways, like other European photovoltaic cell manufacturers has been severely hit due to the global oversupply that has led to plunging prices. In 2012, Sunways cut 40 per cent of its 265 strong workforce and said it would focus on solar cells for specialist applications, and stop production of solar cells for standard modules.

European solar companies have also had to face stiff competition from Chinese manufacturers, who enjoy huge state subsidies. The market prices for solar products declined drastically in the past two years with prices for solar modules dropping by more than 50 per cent, and solar cells by up to 60 per cent.

Part of the European solar industry problems were due to subsidies offered in the renewable energy sector, which led companies to ramp up production thereby leading to oversupply.

Germany, which accounts for almost half of Europe's solar power capacity, is under pressure to do away with the subsidies in line with other European nations.

Several German solar manufacturers have recently gone bankrupt, including Q-Cells, once the world's biggest maker of photovoltaic cells, Conergy, once one of Europe's biggest solar companies, Scheuten Solar, Solarhybrid, Odersun, and many others.