The badly hit solar module manufacturer secures $40 million and continues to negotiate with creditors. Is there a chance of rescue?
Meyer Burger would like to finalize a new supply contract for solar modules in December.
Clemens Bilan / EPA
Those who are said to be dead live longer. The solar module manufacturer Meyer Burger, which is in dire financial straits, has managed to agree on new support with bondholders. The investors have agreed to provide the company with almost $40 million. With this money, Meyer Burger can maintain its business activities for the time being and, for example, pay suppliers. At the same time, final restructuring is being negotiated.
The Thun-based company got its breathing space at the last minute, so to speak. However, due to the risks, lenders are not prepared to pay out the entire sum in one fell swoop. For the moment, only a portion of almost $20 million has been approved, as Meyer Burger announced on Friday.
The major American customer is not yet lost
The granting of the remainder is linked to unspecified milestones that Meyer Burger must achieve in the negotiations about its future. The main focus is on the future relationship with the major American customer Desri. The solar park operator had plunged Meyer Burger even deeper into trouble in mid-November when he canceled a purchase agreement for the manufacturer’s solar modules.
This hit Meyer Burger hard because a large part of the planned production was designed for Desri. The company had built a factory for this purpose in the state of Arizona. Why Desri terminated the contract was never officially explained. There is speculation that uncertainty caused by Donald Trump’s re-election as US President was one reason. He could limit subsidies for renewable energy or impose tariffs on the solar industry.
It is also possible that Desri lost confidence that Meyer Burger could meet its delivery obligations. But the company has not completely lost the Americans as customers: advanced discussions are currently underway about a new purchase regulation. It can be assumed that Desri wants to achieve lower prices than those agreed upon when the old contract was concluded in 2022. Zürcher Kantonalbank (ZKB) fears that the new conditions will be less advantageous.
In 2022, solar modules were significantly more expensive than they are today. The drop in prices is largely due to an oversupply by Chinese manufacturers – which is also the decisive reason for Meyer Burger’s misery. The company had tried to relocate its entire production of solar cells and modules from Germany to the USA in order to be protected from Chinese competition there thanks to market isolation and subsidies.
The lifeline only lasts until mid-January
But in the middle of this moving phase, Meyer Burger ran out of money in August. Apparently no new capital could be mobilized from major shareholder Pyotr Kondrashev. The Russian tycoon is not part of the group of bondholders that is now providing the bridge financing. Instead, they are investment funds.
The credit facility offer runs until January 17, 2025. By then, Meyer Burger must have negotiated a convincing business plan to be able to access the full $40 million. It’s about a perspective for the planned production of solar modules with a capacity of 1.4 gigawatts per year. The Arizona plant could achieve this output next summer. The modules are built from solar cells that are manufactured at the German location in Bitterfeld-Wolfen.
The Chairman of the Board of Directors, Franz Richter, who took over as CEO in September after the departure of the former boss Gunter Erfurt, would like to finalize the contract with Desri in December. The stock market reacted with relief to the unexpected sign of life: Meyer Burger’s share price jumped by more than 200 percent by midday on Friday. However, even after that, a title is only worth around 1.60 francs. At the beginning of the year the securities were at 50 francs.
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