By Mark Waite

Solar Millennium AG, the company that received the go-ahead to build two, 250-megawatt, concentrated solar power plants in Amargosa Valley, has filed for bankruptcy protection in Germany.

The filing of insolvency was blamed on substantial projects being postponed, the company states. It was a step taken to protect the existing assets for shareholders and creditors, Solar Millennium AG stated in a press release.

The release, dated Dec. 21, states “Solar Millennium AG, Erlangen, has filed for the opening of insolvency proceedings at the district court in Fuerth.”

Solarhybrid AG, another German company, announced a conditional agreement to acquire Solar Millennium and its pipeline of 2.25 gigawatts of power under development, back in October.

“Already since September, the company has been in a very advanced state of negotiations on the sale of the U.S. pipeline. Agreement exists to a large extent on this transaction, substantial contracts have already been signed. However, certain conditions for the effectiveness of the agreements have not yet been met,” Solar Millennium said in the press release, located on the company’s website.

A binding confirmation of the amount and time of the cash flows was delayed. The company also referred to intensive negotiations with investors on the Ibersol project.

“Both transactions would have generated funds beyond the current need for liquidity which would have laid the foundation for a further development of the company,” Solar Millennium states.

In a followup press release, Solar Millennium announced the appointment of Volker Bohm, attorney-at-law, from the Nuremberg, Germany office of the insolvency law firm Schultze and Braun, as the preliminary insolvency administrator. Bohm immediately headed to company offices in Erlangen to get an idea of the company’s situation.

Solar Millennium states, “Bohm’s first step will be to review whether it is possible to continue business operations during the preliminary bankruptcy proceedings. If so, he will focus on pre-financing of the insolvency funds to ensure that the employees of the Solar Millennium AG receive their salaries and wages within the legal guidelines.”

Solarhybrid, based in Brilon, Germany, said in a press release on its website that the acquisition of the Solar Millennium solar projects has been delayed until the first quarter of 2012.

Solarhybrid said both companies signed definitive agreements Dec. 1 after finalizing due diligence examinations.

The closing of the agreements and further payments depend on the approval by the two companies’ board of directors and a minority shareholder in Solar Millennium.

The Solarhybrid board approved the agreements under certain conditions, namely the clarification of the application of project rights to photovoltaic power instead of solar thermal technology, which is expected to be concluded in January.

The agreements state that upon closing of the deal, a loan already granted to Solar Millennium AG is converted into a transaction payment and more substantial payments will be due at that time.

Solarhybrid announced that earn out payments become due upon the connection of the Solar Millennium power plants to the grid, which isn’t expected before 2016.

Solar Millennium was granted a record of decision by the U.S. Secretary of the Interior in November 2010 granting the company the right-of-way to build two, 250-megawatt, solar power plants on 4,600 acres of public land along Farm Road in Amargosa Valley. But the company hasn’t acted yet to construct the facilities. Solar Millennium is also planning solar power plants in Blythe, Palen and Ridgecrest, Calif.

Don Reid, Solar Millennium LLC senior project development advisor, was still bullish on the Amargosa Valley project.

“At this time the North American assets are not involved,” Reid said. Speaking of the Amargosa Valley project, he said, “The site is an outstanding site and it’s going to go forward.”

Reid said the Amargosa Valley project will be in a very competitive position to bid on providing power to the California energy market with the entrance by Valley Electric Association into the California Independent System Operators network, which runs 80 percent of the grid in the Golden State.

Billy Owens, director of project development for Solar Millennium LLC, dispelled reports last month the Amargosa Valley project was shelved, despite a decision by NV Energy last March not to purchase power. California, which is under a mandate to produce 33 percent of its power from renewable energy, is now seen as the primary market by solar energy producers in southern Nevada.

Owens said the project was in “inactive development, where Solar Millennium is trying to get a utility company in California as a customer and transmission access.

Global Finance Corp., a 10 percent partner in the Solar Millennium project, obtained a restraining order last month to prevent the sale of the company to Solarhybrid AG. Global Finance claimed it wasn’t informed of the plan to sell Solar Millennium’s project to Solarhybrid. Global Finance claims it made several requests for transaction documents which were denied.

Reid, the Global Finance Corporation managing director, said a joint development agreement for the Amargosa Valley project with Solar Trust of America LLC, the legal parent of Solar Millennium, was still valid, though Solar Trust President Alice Harron declared the agreement dead.