December 7 (Renewables Now) - Sentis Capital PCC, the largest shareholder in Meyer Burger Technology AG (SWX:MBTN), believes the Swiss solar industry supplier should consider tapping the capital market to expand its in-house solar cell production capacity.
The company, which has a 6.14% stake in Meyer Burger, sees own production of heterojunction (HJT) and tandem solar cells as “a huge opportunity” for the Swiss equipment supplier. According to Sentis Capital, it will thus protect its technology and benefit directly from future technological advances.
Anton Karl, Mark Kerekes, members of the Sentis board, said on Thursday financing a solar cell production capacity of 5 GW to 10 GW from own funds at Meyer Burger is not possible at present, but the company can do it through “a capital increase on the capital market or through a strategic partner who is prepared to pay a corresponding premium.” Still, they warn that in many cases partnerships are not really attractive for a company's shareholders, as the latter cannot participate equally in the exploitable potential.
Sentis has been informed that Meyer Burger is seeking ways to commercialise its high technology portfolio, especially for HJT and tandem solar cell manufacturing processes and equipment. A Swiss investment bank is assisting in the process.
In the current challenging market environment, leading solar module makers are reluctant to invest heavily in HJT. Significant investments by the customer are needed for a complete transition of existing production lines. At the same time, Karl and Kerekes explain, there is the risk that the competitive advantage will be lost relatively quickly, unless the customer agrees some form of exclusivity with Meyer Burger.
Based on own analyses, Sentis Capital is convinced that Meyer Burger has a significant competitive advantage in solar technologies, while it also has the necessary experience for own production as it has been manufacturing HJT solar cells in a German mass production facility in Hohenstein-Ernstthal for roughly five years now.
The shareholder has asked the board of directors to review all options in a competitive and global process and to choose the best one for the shareholder. However, it says “there are indications that the Board of Directors is shying away from presenting the capital market with what may be the best option for financing its own production through the capital market.”
Sentis said Meyer Burger must gain new credibility by renewing its board.
Sentis Capital is a unit of Elbogross SA, which in turn is wholly owned by Russian businessman Petr Kondrashev.
In October, the Swiss solar equipment maker said it would relocated more activities, such as sales and services functions, to Asia under a transformation programme, which will involve about 100 job cuts. Theses will account for 9% of the company's expected workforce of around 1,100 after the previously announced end of manufacturing activities in Thun, which involves the transfer of the production of diamond wire saws from Thun to China.
Meyer Burger has been in the red since 2012. In the first half of 2018, it announced a net profit of CHF 8.3 million (USD 8.3m/EUR 7.3m), mainly on the back of cost optimisation programmes and decisions to discontinue non-profitable business units and products. Incoming orders, however, were weaker than expected, falling to CHF 137.9 million from CHF 308.5 million in the first six months of 2017.
The company’s order backlog declined to CHF 240.9 million in mid-2018 from CHF 343.8 million at end-December 2017. The company explained that the intensifying US-China trade tensions, which included new import tariffs on photovoltaic (PV) solar modules and cells, and Chian's May 31 announcement to cut solar subsidies "have led to a currently significant reluctance regarding new investments on behalf of Meyer Burger’s PV customers."
(CHF 1 = USD 1/EUR 0.88)