Solar Collapse The Winners and Losers of Solarworld

Creditors of bankrupt photovoltaics firm Solarworld's face heavy losses as the “Sun King” founder Frank Asbeck walks away with a handsome profit.
Quelle: dpa
Frank Asbeck was dubbed the Sun King for founding what was once considered the German solar sector's flagship.
(Source: dpa)

The Bonn District Court has appointed Horst Piepenburg, an experienced expert in restructuring, as provisional insolvency administrator for Solarworld. The 63-year-old Düsseldorf lawyer is tasked with the difficult mission of finding a buyer for the former flagship of Germany’s solar technology industry.

Solarworld was once the world's largest solar module manufacturer. But along with countless other German firms in the sector, it has been unable to compete with cheap imports from China. It filed for insolvency last week.

Mr. Piepenburg met some of the group’s over 3,000 employees on Monday in Arnstadt in the state of Thuringia, where the smallest of Solarworld’s three production sites is located. On Tuesday, Mr. Piepenburg is expected at Solarworld’s largest module factory in Freiberg, Saxony for further talks.

Mr. Piepenburg is trying to keep business operations running as far as possible. Production is to continue at both German plants for the time being.

The insolvency administrator is also seeking to ensure the company can pay wages for May, June and July through the short-term financing of insolvency funds provided under German insolvency law. “Should the Federal Employment Agency agree to this procedure, it means the insolvency administrator can work without payroll costs in the first three months,” Rainer Schaaf told Handelsblatt.

Mr. Schaaf, who specializes in insolvency law at Theopark, says Mr. Piepenburg could be expected to initiate the actual insolvency proceedings at the beginning of August. “As long as there are interested parties, it could then be sold anytime,” Mr. Schaaf said. “It is usually best for the creditors if the company can be resold in its entirety,” he added.

But it’s already clear lenders will take a large financial hit. “The worse case is that Solarworld will be liquidated,” said restructuring expert Andreas Ziegenhagen of multinational law firm Dentons. But even in the best possible case – a resale of the whole company – creditors “will be forced to waive the majority of their claims,” Mr. Ziegenhagen fears. According to Bloomberg, €170 million, or $186 million, are on the line from just two outstanding debts.

Solarworld founder Frank Asbeck is also likely to have to accept smaller losses. His shares, amounting to 20.85 percent of Solarworld, are currently worth only around €4.5 million on the stock market. These losses seem paltry in view of the earnings the entrepreneur often called the “Sun King” has raked in over the years. While investors essentially threw away money with Solarworld’s stocks and bonds, Mr. Asbeck has pocketed a handsome sum.

Handelsblatt estimates that Mr. Asbeck and his family have earned €95 million...

Handelsblatt estimates that Mr. Asbeck and his family have earned €95 million through the sale of shares, dividend payments, and executive board salaries since going public in 1999. Mr. Asbeck’s biggest payoff has been from selling shares. This is apparent from insider transaction data at Solarworld put together by Olaf Stotz for Handelsblatt, professor at the Frankfurt School of Finance and Management.

Mr. Stotz’s research is based on public reports of transactions involving shares by company directors or related parties – so-called director’s dealings. He found that Mr. Asbeck and two companies controlled by him and his family traded Solarworld shares with a volume of around €163 million between 2004 and 2014. This volume was calculated from the number of shares traded and the share price at the time of the transaction. Share purchases accounted for €53 million, and share sales €110 million. All in all, Mr. Asbeck and his family had a capital gain of €57 million with Solarworld shares.

The Asbeck clan was also able to profit from dividend payments, which amounted to around €28.5 million between 2000 and 2011. Added to that are the substantial wages Mr. Asbeck paid himself. His executive board income has been listed in Solarworld’s financial statements since 2006, and show that his executive and supervisory board wages at Solarworld AG and it subsidiaries add up to around €9 million.

Mr. Asbeck himself, declined to comment on his income. But Solarworld disclosed that in 2009 the company was the first of the listed companies to cap executive wages at “20 times the average wage.” Moreover, when Solarworld was being restructured around 2013, Mr. Asbeck went without his executive salary “in the interest of the company.” As a Solarworld shareholder, it said, Mr. Asbeck profited from dividend payments like any other.

Franz Hubik covers renewable energy for Handelsblatt in Düsseldorf. Jakob Blume is an intern at Handelsblatt in Düsseldorf. To contact the author: [email protected]