Dear SolarWorld CEO Frank Asbeck: 0

solarworld-ceoDear Mr. Asbeck,

I just saw this story on Reuters that sums up how dire your situation is:

Debt-laden SolarWorld said it was in “constructive” talks with creditors on a restructuring plan after delaying the date for its annual press conference. An announcement will be made when a debt plan for Germany’s largest solar group has been approved, SolarWorld said in a statement on Tuesday. SolarWorld is suffering from a crisis caused by overcapacity of cells and modules, falling government subsidies for solar power and cheaper Asian rivals, causing it to warn bondholders in January of a debt restructuring.

When it comes to assigning blame for SolarWorld’s financial predicament, I find it interesting that excessive executive compensation was conveniently omitted as one of the reasons for your company’s need to restructure its debt.

For instance, that sweet little $3.5 million dividend payment you recently paid to yourself during a year in which your company lost $374 million probably didn’t help matters.

However, my purpose in writing to you today is not to remind you of the past but to give you a very valuable piece of advice so SolarWorld has a shot at a future.

So here it is….

If those investment bankers at Houlihan Lokey you retained to help SolarWorld restructure its debt start proposing ideas that contain words or phrases like “convertible preferred stock” or “convertible debt” do yourself and say “nein” which is German for no.

Trust me, there is a reason they call it death spiral financing.

p.s. What’s up with that photo (see image above) of you posing on a solar panel? Are you trying to demonstrate your company’s solar panels are structurally sound and can support a lot of weight or are you paying homage to male supermodel Derek Zoolander’s famous Blue Steel pose?


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