A German court on Friday approved Centrotherms debt-for-equity plan, resulting in the termination of its insolvency proceedings.
Centrotherm is now a fully independent and reorganized company with long-term stable financing and positive future prospects, the company said on Monday.
"We have done our reorganization homework in a difficult market environment, and we are a strengthened and reliable partner for customers and suppliers," said Centrotherm management board members Tobias Hoefer and Jan von Schuckmann in a joint statement.
The Ulm District Court approved a plan presented by the company in January. The leading German PV equipment manufacturer overcame the decisive hurdle for the company's reorganization and recapitalization in January when a large majority of creditors and shareholders approved the debt-for-equity plan.
The courts approval of the plan also covers the companys subsidiaries, Centrotherm Thermal Solutions GmbH & Co. KG and Centrotherm SiTec GmbH, which had independent proceedings underway. Centrotherms insolvency proceedings have been running since October 2012.
"Centrotherm can now successfully complete its reorganization and further strengthen its position as a globally leading provider of production technology for thermal surface processes in the photovoltaic, semiconductor and microelectronic industries, said Hoefer and von Schuckmann.
The approved plan benefits shareholders, employees and creditors, they added.
"For shareholders, millions of euros' worth of assets, the stock market listing and their shares' capital appreciation potential are preserved. Creditors retain the opportunity to realize 100% of their receivables and, not least, all of the currently around 900 jobs within the Centrotherm Group can be secured."
As part of the plan, the company will convert unsecured creditors' receivables into company's shares, bolstering its capital structure. Creditors have agreed to assign 70% of their receivables that have been determined to be unconditional and without restriction to an administration company, making a capital increase possible.
The company's share capital will first be reduced through consolidating the shares in a five to one ratio, equivalent to a EUR 16.9 million ($22 million) reduction to EUR 4.2 million ($5.5 million).
The share capital will then be increased to EUR 21.2 million ($27.6 million) by way of a cash capital increase against non-cash capital contributions from the creditor receivables. As a result, the administration company will hold 80% of Centrotherms shares, with former shareholders retaining the remaining 20%.
Despite the good news, the company offered a gloomy assessment going forward, pointing out that the market environment continues to prove very difficult, and no positive signs exist of improvement over the next months.
Nevertheless, Centrotherm said it would "continue to invest double-digit amounts of millions of euros to develop new technologies and products in the photovoltaic and semiconductor areas in order to secure and expand its globally leading technological position."
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