Stilo Energy has filed for bankruptcy
A company operating in the photovoltaic market has filed for bankruptcy. First, however, it is trying to reach an arrangement with its creditors.
Stilo Energy’s bankruptcy petition will be recognized if the company fails to successfully complete the proceedings for approval of an arrangement with creditors. These proceedings are ongoing.
Stilo Energy decided to take the opportunity to restructure after learning of Bank Pekao’s failure to renew its agreement to suspend claims. As a result, the bank has the authority to initiate collection actions and pursue Stilo Energy for repayment of its PLN 6 million loan. The next step was to file for bankruptcy. Subsequently, the company’s entire board of directors resigned.
Stili Energy’s difficult situation is the result of an inefficient business model and poor cost control. The company failed to ensure product diversification, had a flawed pricing policy, poor financial planning and high fixed costs. The outgoing management, after talks with creditors, argues that there are good chances for a deal. However, it is necessary to raise financing. It would fill the capital gap created when bank financing was halted.
When a company files for restructuring and bankruptcy at the same time, the restructuring application is considered first. The bankruptcy court pauses until a final ruling is made on the restructuring.