Bond issue in March, insolvency in June: Greentech company Solarnative GmbH files for insolvency at record speed - law firm Schirp und Partner examines claims against the underwriters One Square Financial Engineers and Heuking

Only three months after the start of the subscription of its bond (WKN: A38251 | ISIN: DE000A382517) on 19 March 2024, the German greentech company Solarnative GmbH filed for insolvency. This rapid transition from issue to insolvency filing has caused consternation in the German capital market and raises serious questions about the company's organisational and financial structures, but also about the diligence of the underwriters One Square Financial Engineers and Heuking.

The bond, which was offered with a supposedly attractive interest rate of up to 12.25 per cent p.a., was only able to place a volume of EUR 1.24 million on the value date - much to the disappointment of the management. Dr Julian Mattheis, Managing Director of Solarnative, explained in an interview with AnleihenFinder on 20 March that the aim of the issue was to use the funds to scale production and strengthen liquidity reserves in order to significantly increase production capacity. He emphasised that the repayments of the bond and the interest payments were secured by the initial use of part of the bond funds as a liquidity cushion and were to be covered by operating cash flows from next year onwards. In addition, further capital increases were planned in order to strengthen the company's equity position.

Lawyer Dr Wolfgang Schirp, who represents aggrieved investors in this bond: "The Solarnative prospectus is strangely evasive on several points. Although the current financing requirement is stated as 13 million euros, it is not stated whether this financing requirement can be covered by the bond or even exceeds this amount. The company has also failed to define a minimum placement amount. In view of Solarnative's obviously acute existential crisis, this would have been necessary to prevent the money of small investors from being lost from the very first second.“ Dr Schirp continued: "It is also striking that this is not the first issue that was structured and accompanied by One Square Financial Engineers and Heuking Kühn Lüer Wojtek and then promptly headed for insolvency. The two and a half months between the end of the issue and the insolvency of Solarnative represent a sad "speed record" in the destruction of investors' money. However, the issues structured by One Square Financial Engineers and Heuking for the medical technology companies Belano Medical AG (WKN: A3H2UW | ISIN: DE000A3H2UW2) and Pentracor GmbH (WKN: A289XB | ISIN: DE000A289XB9) as well as the water technology provider Blueplanet Investments AG (WKN: A3H3F7 | ISIN: DE000A3H3F75) went into insolvency without a sound after issuing their bonds. These repeated events indicate that there is more to it than just the sudden failure of the issuing companies' business ideas."

Dr. Schirp explains: "In general, we are very sceptical when companies that generate hardly any sales attract investors with very ambitious plans that assume sudden and explosive increases in sales and profits (so-called "hockey stick" plans). If you want to gain investor confidence, you should at least have demonstrated to some extent what you can actually do."

The conclusion: "We generally need more care and responsibility on the part of the issuing companies when issuing bonds/convertible bonds. It is essential to define a minimum placement amount for weak issuers, which must be cancelled if the placement is not reached. This is because if only a small part of the planned issue volume can be achieved, the plans and investments can generally not be realised. Investors' money is then thrown into a bottomless pit from the very first second. At Solarnative in particular, we are calling on other aggrieved parties to get in touch with us, because in this drastic case we want to hold the issuing managers accountable."  

For further information, please contact Dr Wolfgang Schirp, Schirp Schmidt-Morsbach Rechtsanwälte PartG mbB, Leipziger Platz 9, D - 10117 Berlin, Tel. 0049-30-3276170, mail schirp@schirp.com, URL: www.schirp.com