German wind park operator Prokon has warned that it may have to file for insolvency if it is unable to strike a deal with investors who bought its profit-participation certificates.
“If we do not succeed – together with you, our investors – to stabilise the liquidity position very quickly, we will likely be obliged to initiate a self-administered insolvency plan at the end of January,” Prokon said on its website on Saturday.
Prokon, which said it had lost 210 million euros ($287 million) as of October 2013, is urging about 75,000 investors holding certificates worth 1.4 billion euros not to cancel these securities.
Profit-participation certificates offer high coupon payments – at least six percent in Prokon’s case – but also account for losses of a company. Unlike shares, the securities do not give holders any say in the company.
“We have to make clear that the harum-scarum cancellations are bringing us into distress,” the company said, adding that after repaying investors 130 million euros in 2013 it had received further cancellations worth 150 million due in January and February – a sum that it could not pay back on time.
German retail investor lobby group SdK on Saturday rejected widespread media characterisation of Prokon’s business model as a Ponzi scheme.