WestLB downgrades rating on Conergy

(ADPnews) - Dec 22, 2010 - WestLB lowered its advice on German solar energy company Conergy AG (ETR:CGY) to "sell" from "neutral" and set a price target of EUR 0.45 on the shares.

The downgrade came after Conergy's creditors have approved the refinancing of the ailing company.

Despite that the debts will fall significantly after the debt-equity swap planned by the company, Conergy will still have to cope with a huge dilution in equity, analyst Peter Wirtz said.

The upcoming reduction of Conergy's capital to only EUR 50 million (USD 65.8m) from EUR 400 million currently, will lower the number of shares to one-eight. That means that shareholders will lose 87.5% of their holding in the company.

WestLB's "sell" advice means that a company's share price is expected to underperform by at least 10% the index it is listed on over the next 12 months.

(EUR 1.0 = USD 1.316)

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