(Bloomberg) -- Swiss solar panel maker Meyer Burger Technology AG said its ability to continue operating cannot be assured given its indebtedness and cash burn, underscoring the industry’s troubles as cheaper Chinese modules flood the market.
The company saw sales halve in the first six months of 2024 compared to a year earlier, while generating a loss of CHF123.5 million ($142 million) in terms of earnings before interest, taxes, depreciation and amortization. Meyer Burger has announced a number of strategic overhauls in the past year to try to stem its crisis, but recently had to stop a planned solar cell production project in Colorado Springs due to a lack of required third-party financing.
The company is emblematic of the wider state of the solar panel industry in Europe and the US with the near hegemony of cheap Chinese products in the global market. Despite government support, Meyer Burger has continued to stumble and has now nearly run out of options.
The new module plant in Goodyear is largely installed and in the ramp-up phase, but further investments are required for completion, it said in a statement late on Thursday. This has resulted in a high double-digit million funding gap and would require a debt restructuring.
The company said it’s in advanced negotiations with a group of convertible bondholders, who have shown “initial willingness” to provide fresh capital to help plug its financing needs and restructure their notes.
“The group’s ability to continue operating as a going concern assumes a successful restructuring and closure of its financing efforts” and the implementation of its business plan, Meyer Burger said. “There is no assurance that this will be achievable or on terms attractive to Meyer Burger and its shareholders.”
Meyer Burger has issued around €360 million in convertible bonds, whose price has plunged as operational performance worsened. The note due in July 2027 is quoted at 32.5 cents on the euro, according to data compiled by Bloomberg.
The company said its number of employees will shrink by about a fifth by the end of 2025. It’s aiming for profitable business operations from 2026, when sales should be between CHF350 million to CHF400 million and EBITDA at around CHF70 million.
Meyer Burger’s shares fell as much as 25% in Zurich, to a fresh record low.
--With assistance from Allegra Catelli.
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