SolarWorld is discussing with its creditors to finalize an agreement as to the restructuring of the company in the next two to three weeks. The Germany based builder of solar panels is in fiscal dire straits.

Two individuals who spoke on condition of anonymity said that the firm is seeking a 'reasonable, sustatinable solution' that would avoid 'SolarWorld to file for insolvency.'

To achieve this, creditors would need to cancel some of the debts and while others would be swapped for equity, according to the sources. In the end, the shareholders of the firm would be left with less than 10% of the equity from where they started.

SolarWorld declined to comment on the rumors and its advisors, Houliuhan Lokey as well as Macquarie, advisor to the creditors, declined to provide any comments as well.

SolarWorld is currently carrying Eur900 million in debt and other liabilities and is currently struggling with weak demand, industry competition and declining subsidies from government.