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Solar firm Meyer Burger announces rights issue plan, shares tumble

Reuters
Updated ·2-min read

ZURICH (Reuters) -Swiss solar panel maker Meyer Burger on Friday called an extraordinary meeting to approve a 200 million-250 million Swiss franc ($227 million-$284 million) rights issue to help plug a funding gap flagged earlier this year.

Shares in the group slid more than 14% following the news, though they clawed back some of those losses over the course of the day, and by 1144 GMT were down 4.8%. The meeting is due to take place on March 18.

The company said the German government has also approved an export guarantee for financing by a commercial bank for up to $95 million, and that it is applying for a loan of between $200 million-250 million from the U.S. Energy Department.

The combination of the rights issue, the export credit guarantee and other loans are enough to close the financing gap of 450 million Swiss francs it mentioned in January, said Meyer Burger.

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One of Europe's last manufacturers of solar panels, Meyer Burger said the funds will finance the completion of its Colorado and Arizona manufacturing sites.

It is also part of a larger plan to stop sustained losses in Europe and take advantage of the U.S. market, the company said.

"A clearer focus on our U.S. business makes us independent of political decisions in Europe," CEO Gunter Erfurt said.

Meyer Burger said that a lack of policy support measures to correct market distortions from oversupply and dumping on prices of solar modules meant it would also be halting production at its loss-making site in Germany's Freiberg in March.

The company had threatened to close the plant, affecting around 500 employees, in January.

A spokesperson for Germany's economy ministry said a number of conditions were attached to the export guarantee, including that the company maintained one of its other sites in the country.

"How the company organises its sites is up to the company," added the spokesperson on Friday.

($1 = 0.8812 Swiss francs)

(Reporting by Noele Illien and Miranda Murray; Editing by John Revill and Jan Harvey)