Due to the worldwide financial crisis and changes in strategic direction, the Korean company LG Electronics (066570.KS) has informed Hamburg, Germany-based Conergy AG (CGY.DE) that it currently does not wish to proceed with the acquisition of a majority stake in Conergy’s solar module production in Frankfurt (Oder) through a joint venture.
LG will however continue to review other options for cooperation with Conergy, a leading global downstream player, according to a Conergy press release.
On 11th September 2008, Conergy and LG had signed a non-binding Memorandum of Understanding to jointly operate the plant in Frankfurt (Oder).
"Despite LG’s decision we are pleased about the unchanged interest of LG in a continued close collaboration with Conergy as a one of the world’s largest system integrators. This once again reconfirms our chosen downstream strategy. Regarding our plant inFrankfurt (Oder), which is regarded as one of the most modern full-integrated plants of its kind, we will examine all further options", says Dieter Ammer, CEO of Conergy AG. "In addition to negotiations about joint ventures with other interested parties, retaining the plant in the Conergy Group is also a possible scenario. The start of wafer deliveries by MEMC in the third quarter 2008 and the concurrent ramp-up of the plant by year end 2009 will allow profitable production in the future. The current budget of our company takes into account–as previously–the full impact on earnings and liquidity if the plant is retained."
Conergy is currently undertaking a restructuring process. Over the last months, the Hamburg-based company has divested nearly all non-core activities and has withdrawn from markets outside Germany which are not expected to become sufficiently profitable. The company plans to stabilize its financial situation on a sustainable basis by means of a capital increase.
About Conergy
Since its founding in 1998, Hamburg-based Conergy AG has sold more than a gigawatt in renewable energy, making it one of the biggest European suppliers of solar energy and other renewable energies, and a world leader in solar system integration. Of the one gigawatt in renewable energies, Conergy has installed more than 400 megawatts in its major projects, Of the total one gigawatt, 200 megawatts falls to its wind energy park projects and 800 to its globally marketed solar modules. According to the German Solar Industry Association (BSW) this is just under a fifth of the entire installed photovoltaic output in Germany. Calculative one in ten modules worldwide was produced, sold or installed by Conergy.
The company now produces, installs and designs solar power systems and wind turbines in around 20 countries. The Conergy Group is represented with its own branches on five continents.
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