Q-Cells achieves an agreement in principle with bondholders

BITTERFELD-WOLFEN, GERMANY: Q-Cells SE has achieved an agreement in principle on the restructuring of all three outstanding convertible bonds in a single comprehensive transaction. Following the 24 January 2012 release in which the Company indicated it would pursue a two-step financial restructuring, significant bondholders of the 2012, 2014 and 2015 bonds (Bondholders) have reached a mutually beneficial agreement that they believe will create maximum value for all bondholders and the Company by eliminating the uncertainty and risk inherent in a two-step process.

The Bondholders along with the Company believe the one-step comprehensive debt reduction they have agreed to, will unlock significant value for all stakeholders by providing the Company’s customers, suppliers, partners, and employees the certainty and confidence they need given the current solar industry dynamics. Following this transaction, Q-Cells with a solid balance sheet structure will be uniquely positioned to capitalize on future growth and opportunities in the photovoltaic market.

The agreement was achieved following extensive talks with the Bondholders who have agreed with their substantial bondholdings to the comprehensive restructuring. The Company had been engaged in these talks since the beginning of December 2011. Q-Cells has now achieved a fundamental milestone in the growth and evolution of the Company.

The agreement comprises the following key elements:

* A cash payment of € 20 million to the 2012 bondholders payable upon the successful consummation of the financial restructuring.

* The remaining outstanding principal plus any accrued and unpaid interest of the 2012 bonds, following the € 20 million cash payment, along with the outstanding principal plus any accrued and unpaid interest of the convertible bonds due in 2014 and 2015 immediately prior to the conversion date shall be contributed by way of a debt and capital reduction on a pari passu basis in return for the assumption of almost the entire equity of Q-Cells SE (Debt-to-Equity-Swap). Following this equitisation, the 2012, 2014 and 2015 bondholders shall collectively hold at least 95 percent of the issued share capital of Q-Cells SE.

* An additional pari passu cash payment to the 2012, 2014 and 2015 bondholders upon the successful consummation of the financial restructuring if Q-Cells is successful in the sale of any non-core assets and retains robust future liquidity post any additional cash payment. Although the timing, amount and settlement of any non-core asset sales are highly uncertain, the Company's advisors have estimated these non-core assets which have minimal EBIT effect for the achievement of the business plan could be worth up to € 200 million over the next several years.

After an independent review of the medium-term business plan the Bondholders have agreed with the Company that it is best to leave maximum cash in the Company in order to position it as a nearly debt-free, strong global player in the highly competitive photovoltaic market. As outlined in Q-Cells’ 24 January 2012 release, the Company expects 2012 to be a negative year for EBITDA and during the remainder of this year the company will need adequate liquidity for critical capex, restricted cash, near-term operating losses, seasonal effects as well as restructuring costs.

By maintaining the € 304 million of liquidity as at 31 December 2011 in the business, this will then leave the Company in the best possible position to capture the strong forecast performance in the years 2013 to 2015 and maximise value for all stakeholders.

The implementation of the agreement is subject to the approval of the bondholders, the shareholders of Q-Cells SE and the involved authorities. For this purpose, the Company will seek approval from all parties involved. In particular, the capital reduction is subject to the approval of the shareholders at an extraordinary general meeting. Q-Cells expects the implementation of the financial restructuring in the second half of this year.

The financial restructuring enables the Company to largely free itself from debt and to return to a solid balance sheet structure with a comfortable equity ratio. In a continuously challenging solar market a nearly debt free business would be a unique position for Q-Cells to act as a competitive, technologically leading, premium player. The Company believes that this is the basis for a successful further development of Q-Cells as an independent and competitive company and to benefit from the expected strong mid-term market growth in the global photovoltaic industry.