Hedge funds close to taking control over German Conergy - report

(ADPnews) - Dec 20, 2010 - Hedge funds are close to taking control over troubled German solar power company Conergy AG (ETR:CGY), daily Financial Times Deutschland (FTD) reported Friday citing news agency Reuters.

According to two sources in the know, Conergy's creditors are about to agree on a debt restructuring deal, allowing financial investors York Capital and Sothic Capital to get the control over the solar company, Reuters reported.

Only the formal approval of the banks is needed in order the agreement to become effective, the sources told Reuters.

York Capital and Sothic Capital have already acquired Conergy's debt from banks with a discount of 60%, FTD reported.

According to the deal, the hedge funds will get around 70% in Conergy and Commerzbank's (ETR:CBK) stake of 29% will be lowered to around 9%, the news agency reported citing its sources. In line with the agreement of the creditors, Conergy's debt will drop to around EUR 130 million (USD 172m).

Conergy needs to find a solution for its refinancing by December 21, when its credits become due, or it would have to file for insolvency, FTD wrote.

(EUR 1.0 = USD 1.323)

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