Phoenix Solar AG has sold its operation and maintenance activities (O&M business) in Europe to SMA Solar Technology AG. Proceeds from the sale are to be used to repay Phoenix Solar’s debt and to strengthen its core operations.
The contractual content is kept confidential and the disposal, which has been planned since the end of 2013, does not affect the O&M activities of the company's subsidiaries. Instead, their O&M business is to be expanded in the context of EPC projects realized in the future. The validity of the sale is still contingent on a few prerequisites which are to be fulfilled in the coming weeks.
Part of the process was to assess the importance of this business against the backdrop of the way Phoenix Solar AG's strategy was developing. Three aspects prompted the consideration of a sale: the discontinuation of the project business operated from Germany in the first quarter of 2013 and the resulting lack of new business generated for O&M, the downtrend in the construction of large photovoltaic power plants by the European subsidiaries and the lack of synergies with the O&M activities of the subsidiaries in Asia and the USA.
The good earnings position of the business, which enjoys a great deal of stability owing to the contract portfolio existing with partly long contractual terms, combined with a motivated team which guarantees that the business will continue to run smoothly, were indications that a transfer to another market participant would be successful. The proceeds from the sale are to be used to repay debt and to strengthen the company's core operations.
Dr. Bernd Köhler, Chief Executive Officer of Phoenix Solar AG, stated: "It was not an easy decision for us to part with our Ulm-based O&M business. However, in view of our strategic focus on Asia and the USA, providing support for large solar parks in Europe was no longer readily compatible. Seen from this standpoint, the business did not have a strategic perspective. By contrast, we know that the prospects for our European O&M activities are very good with SMA, and that our former customers will continue to receive the best possible support. We will be able to use the proceeds from the sale to reduce our debt and strengthen our core business."
