Solar Millennium AG : Press release by Solar Millennium AG's interim insolvency administrator: Selling process has started

2012-01-05

Erlangen, 05 January 2012 The interim insolvency administrator of Solar Millennium AG, Volker Böhm, is maintaining the business operations of the insolvent company in order to permit an investor solution. Mr Böhm's aim is to sell the project companies as a package or individually to one or more investors. This plan includes the American subsidiary "Solar Trust" as well as the other affiliated companies.

Solar Millennium AG plans and finances solar power plants around the world. "With its internationally experienced project development team, Solar Millennium has considerable know-how," stressed Mr Böhm today at the company headquarters in Erlangen. Mr Böhm has engaged the management consultancy Deloitte to look for investors. "The investor process which is now beginning will enable the value of the existing projects and investments to be ascertained according to the standards which apply on the market."

One particular challenge in the selling process is presented by the heterogeneous structure of the company portfolio. In total Solar Millennium has around 60 project companies and shares in companies in numerous countries worldwide, above all in Germany, the USA and Spain, but also in countries such as Israel, Morocco, Turkey and Egypt, with the various agreements largely having been concluded in accordance with national law. Most of the projects are at a very early development stage: Only one power station has already been completed, and one other is under construction. Furthermore the projects are being implemented jointly with industrial partners. This means that negotiations regarding whether a project should be continued or sold must be conducted individually with each company, plus a large number of partners. In addition to this, in the case of some companies the other shareholders may also be entitled to acquire the business shares of Solar Millennium AG as a result of insolvency proceedings. All this does not make the aim of maintaining the projects any easier, says Mr Böhm. However, the insolvency administrator team and company staff are working flat out to find solutions.

The insolvency fund means that payment of the wages and salaries of the 60 employees affected by the insolvency are guaranteed for three months, in other words, up to and including February 2012. Around 250 further staff members are employed in the Solar Millennium project companies and affiliates. These companies are not currently subject to any insolvency issues.

To what extent the investors can expect to get at least some of their money back depends on the type of their investment: Solar Millennium financed most of the projects by means of, among other things, five owner partial debentures which amount to a cash volume of around 227 million euros. These partial debentures were purchased by, at the last count, some 16,000 investors who thus invested directly in Solar Millennium AG. The owners of these partial debentures are consequently creditors in the insolvency proceedings and, when the insolvency proceedings have been concluded, they will obtain the same percentage as all other unsecured creditors. To do so they must register their claim with the insolvency administrator, but only after proceedings have been opened, which will presumably be in March 2012. It is not possible to predict today how high the percentage will be.

In addition, Solar Millennium AG launched closed funds to finance two projects, namely "Andasol Fonds GmbH & Co. KG" and "Ibersol Fonds GmbH & Co. KG". In terms of company law, the structures of the two funds are virtually identical. Neither fund has filed for insolvency. Both are legally autonomous companies. This means that investors who have bought shares in the funds are limited partners of the respective fund companies and are consequently not directly creditors of Solar Millennium AG. The Andasol project (approx. 48 million euros of collected capital; 3,569 shareholders) has already been completed; the power station recently began generating electricity. The Ibersol fund (approx. 6.6 million euros of collected capital; 537 shareholders), by contrast, was terminated prematurely before insolvency was filed for. The money collected so far has been placed in a trust account and, in accordance with a decision of Ibersol Fonds GmbH & Co. KG, is to be paid out to the fund's creditors when the fund is wound up. However, it will not be wound up by Solar Millennium AG, but by the fund company itself. The shareholders will be notified separately by their fund.

By contrast, the situation is different for the approximately 14,000 shareholders of Solar Millennium AG. As shareholders of Solar Millennium AG, when insolvency proceedings take place they would only have a claim to payment after the claims of all creditors have been 100 % satisfied. There is currently no potential for alternative solutions such as an insolvency plan procedure.

With respect to the accusations which have repeatedly been levelled against the company, Mr Böhm pointed out that one of his duties is to check and enforce possible claims for damages against the parties responsible. At present, however, the focus is on saving the company and existing assets.

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