Conergy, which has workforce of around 1,200, said it would file an application for the opening of insolvency proceedings at a court in the northern city of Hamburg but remained “confident” of finding an investor.

“The management remains confident of achieving a continuation of the whole business operations in the context of insolvency proceedings by means of an investor,” it said in a statement.

Conergy, set up in 1998, has annual sales of around €473 million. It was one of Germany’s biggest solar cell makers in 2011.

Germany was once a leader in solar technology, but the sector has dwindled recently as it battled falling government subsidies and oversupply.

Cut-throat competition has come particularly from China and a number of German companies have recently gone bust or been bought up by foreign rivals.

German industry flagship Q-Cells was purchased by South Korea’s Hanwha.

Engineering giant Siemens has also said it will phase out its activities in solar energy – where it currently employs some 280 people – by 2014 after failing to find a buyer.

Solar panels are at the heart of a current trade spat between China and the European Union, which accuses the Chinese of selling its solar panels below cost, a process known as “dumping”.

According to German government figures, the number of people employed in the solar industry fell to 87,000 in 2012 from 110,900 a year earlier, while sales plummeted by €11.9 billion.

AFP/jcw