State mulls Q-Cells rescue

Saxony-Anhalt's Finance Minister Jens Bullerjahn said Tuesday that the state government was "willing to discuss state support" for debt-laden solar cell maker Q-Cells, which is based in the Eastern German state.

Although he would prefer the company "rescuing itself," he told the newspaper Mitteldeutsche Zeitung on Tuesday that "any chance to restructure the firm must be taken."

Among the options currently discussed within the regional government was direct financial aid, support in making tax payments and loan guarantees, he said.

"We will fight for every job at Q-Cells," Saxony-Anhalt State Premier Reiner Haselhoff told MDR public radio in a statement, referring to the 2,200 jobs at stake in the economically depressed region.

In addition, Left Party members of the Saxony-Anhalt assembly demanded that the state should acquire a stake in the company in exchange for support.

Solar industry shakeout

Q-Cells officially sought protection from its creditors on Tuesday, saying that lacked a "secure financial basis" for continuing operations.

The insolvency of Germany's leading solar cell maker became inevitable after creditors vowed to legally challenge a plan to restructure the firm's huge debt.

However, the company also said in a statement released Monday that its executive board would work with a court administrator to "secure the continuity of the company" during the process.

After Solon - Germany's first solar energy company to go public - and solar project developers Solar Millennium and Solarhybrid, Q-Cells is the fourth victim of a dramatic industry shakeout that appears to have accelerated in recent months.

Eclipsed by cheaper competitors

Industry analysts attribute the series of bankruptcies to cheap panel imports from Asia and cuts in incentives for solar power generation in Germany.

Boosted by state funding, Chinese solar firms have recently gained a financial edge over German manufacturers, allowing them to offer solar panels up to a third cheaper.

In addition, the German government has sharply reduced price guarantees for solar energy, with the latest subsidy cut of 30 percent due to come into effect this summer.

Meanwhile, German solar panel manufacturer Phoenix Solar announced Tuesday that it was struggling to keep afloat.

Concerned about the industry and slumping solar stocks, banks were "reluctant" to maintain a credit agreement with the firm, a spokeswoman said.

uhe/sgb (dpa, Reuters, AFP)