UPDATE 1-SolarWorld to swap equity for debt in restructuring

04/30/2013

* Deal aims to reduce long-term debt by 60 percent

* To propose to EGM a 95 pct reduction of capital stock

* Reported 2012 net loss of 477 mln euros late Monday (Recasts, adds details on debt restructuring, bondholders)

FRANKFURT, April 30 (Reuters) - Germany's SolarWorld said it reached a preliminary deal on restructuring its 1.2 billion euros ($1.6 billion) debt load, including a debt-to-equity swap that would hand its creditors most of the ailing solar group.

SolarWorld, once Germany's largest solar company and 27.84 percent owned by its chief executive and founder, Frank Asbeck, said on Tuesday it had agreed with its major creditors to reduce long-term liabilities by about 60 percent.

Western manufacturers of solar power equipment, above all in Germany, have come under intense pressure due to a global overcapacity in the solar industry, which has forced many players including some of the formerly biggest players, Q-Cells and Solon, to file for insolvency.

SolarWorld also said it would recommend to an extraordinary shareholders' meeting that the company reduce its capital stock by 95 percent, virtually wiping out existing shareholders, in order to then raise fresh equity.

The group in January warned bondholders that it would restructure debt and said holders of securities worth 550 million euros maturing in July 2016 and in January 2017 would be hit the most.

According to Thomson Reuters data, some of the biggest bondholders in the company include GFC Advisers LLC, Do Investment AG and Pioneer Investment Management Ltd.

By aiming for a debt-to-equity swap, SolarWorld follows German peer Conergy, which gave control over the company to hedge funds in a similar deal in late 2010.

SolarWorld late on Monday reported a net loss of 477 million euros for 2012.

($1 = 0.7634 euros) (Reporting by Christoph Steitz; Editing by Harro ten Wolde and Jane Baird)



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