UPDATE 2-Conergy files for insolvency as solar crisis deepens
* German solar group files for insolvency
* Could only reach agreement with 9 out of 10 creditors
* Says investor could still help keep operations going
* Shares plunge 65 percent
(Adds analyst, CEO comments, detail, background, shares)
FRANKFURT, July 5 (Reuters) - German solar group Conergy has filed for insolvency, putting about 800 jobs at risk and becoming the latest casualty in an industry battered by overcapacity, plunging prices and a trade dispute between Europe and China.
Once Europe's largest solar company, Conergy has been fighting for months to secure fresh investment.
On Friday it ran out of time and said two subsidiaries were insolvent, essentially meaning they ran out of money. A district court will now appoint an administrator, who will try to rescue the business.
"This is a clear sign of how huge the crisis was and still is," said Holger Fechner, analyst at NordLB bank.
Rising demand and government subsidies for renewable energy stoked a boom for solar power last decade that turned small start-ups into global giants almost overnight.
But while the demand is still there, some of the subsidies are not as cash-strapped governments cut back. The industry also attracted a wave of new entrants that sent prices plunging and felled a string of top players including U.S.-based Solyndra, as well as Germany's Q-Cells and Solon.
China in particular ramped up production and exports of solar panels and related products, sparking a trade dispute that has seen the European Union slap duties on Chinese imports and Beijing respond with a probe into imports of European wine.
On Friday, there were signs tensions might be thawing, with people familiar with the matter saying China and the EU were moving towards a deal to defuse the conflict.
"In the last fifteen months, we have presented two concrete concepts on the investment by investors to our lenders," Conergy Chief Executive Philip Comberg said.
"We very much regret that they repeatedly could not reach a reliable agreement on a timely implementation of the proposal."
Negotiations included 10 of the Conergy's creditors, nine of which had signalled their agreement to a restructuring deal, Conergy said, without giving further details.
A spokeswoman for the company said about 800 of the company's 1,100 employees were affected by the insolvency filing, also without giving more details.
Sources close to the matter told Reuters on Monday that Conergy was close to striking a deal for an unidentified Asian investor to take a big stake in the firm.
The deal would have seen the investor taking a 261.5 million euro ($338 million) syndicated loan agreement closed by Conergy and 10 banks - led by Commerzbank - in 2011, and pumping 50 million of equity into the group.
Conergy, which makes components such as solar panels and inverters and also plans, finances and operates solar parks, said it was still optimistic of "achieving a continuation of the whole business operations in the context of insolvency proceedings by means of an investor".
Despite the industry's problems with oversupply, solar parks remain in demand from insurers, utilities and financial investors who have discovered them as an asset class, benefiting from guaranteed state subsidies over a fixed period of time.
Conergy had sales of 473.5 million euros last year, but an operating loss of 83 million. During the peak of the solar boom in 2007, its market capitalisation was more than 2.2 billion euros. At 0945 GMT, its shares were down 65 percent at 0.125 euros, valuing the business at about 20 million euros.
($1 = 0.7744 euros)
(Additional reporting by Matthias Inverardi in Duesseldorf; Editing by Victoria Bryan and Mark Potter)