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Conergywind division sale saved at eleventh hour
1 November 2008
German solar company Conergy, which has been battling a financial crisis since last year, has rescued a deal to sell its wind division to private equity investor Warburg Pincus. Conergy had announced that the deal -- expected to provide Conergy with a one-off, largely non-cash, write-off of approximately EUR 35 million -- had collapsed in mid-October. The news came three days after legal firm Rotter Rechtsanwälte sued Conergy, accusing it of withholding information about its liquidity crisis in the second half of 2007. The temporary downfall of the sale to Warburg Pincus came after the city state of Bremen rejected a EUR 3.5 million grant application for Conergy Wind's local production facility. The grant had been previously partially approved, says Conergy, and the transfer of the funding was a key condition of the sale to Warburg Pincus. Without the grant, the firms were "no longer bound to the original contract" and the search for a short term solution threatened to end in "liquidation of Conergy Wind," the company said. Conergy was able to avoid this and rescue the original deal after agreeing to compensate Warburg Pincus for the cancelled public grants.
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