Czech Solek Holding enters insolvency with restructuring plan pre-agreed with creditors

Indebted solar group Solek Holding is likely to undergo restructuring. On Tuesday, the company filed an insolvency petition with the court, together with a restructuring plan it had pre-agreed with most of its creditors. The plan envisages reducing the value of bonds by up to 84.5 percent, with the restructuring to be funded by ENPO Group, an energy fund for qualified investors. The company said so in a press release today. The e15.cz server noted that ENPO Group's ownership structure is not yet publicly known.

Solek, a group operating in renewable energy, with a focus mainly on solar power, ran into financial difficulties last year after a new regulatory framework was introduced in Chile, the main market for the Czech company. In recent months, the company has stopped making payments on its bonds. Its debts amount to billions of crowns.

In recent weeks, Solek therefore offered investors a so-called pre-packaged restructuring. It includes an investment of at least CZK 250 million from ENPO Group, potentially rising to CZK 750 million. At the same time, however, the plan envisages a significant reduction in the value of the bonds issued. According to e15.cz, the minimum bond repayment is set at 15.5 percent of their original value; if the fund makes the maximum investment, it would be 45.6 percent. Most bondholders have now backed the proposal.

Solek has now formally initiated insolvency proceedings. It is subsequently expected to present an updated restructuring plan during the proceedings, which creditors will vote on again.

"Solek Holding SE's management is convinced that restructuring is the most suitable tool for preserving as much of the value of the estate as possible and achieving the highest possible recovery for creditors," the company said today.

According to e15.cz, the qualified investors in ENPO Group are not publicly known. The fund's assets are managed by investment firm Tiller, which is part of Maidavale's portfolio.

Solek's subsidiary Solek Czech Services has also been insolvent since April. Its largest creditor outside the group is Konvertial SPV, owned by arms manufacturer Michal Strnad, which holds claims with a total nominal value of CZK 817 million. A court in Prague has also approved the company's restructuring in this case.

Solek focuses mainly on designing, building and operating solar power plants. The company is active primarily in Chile, where it manages dozens of solar power plants. It also operates in Europe, including the Czech Republic and several other countries. In 2023, the holding company recorded a loss of more than CZK 1 billion.