Evergreen Solar Inc. (ESLR), a maker of electricity generating solar panels, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware, with plans to sell itself at an auction in order to pay roughly 5,000 creditors owed $485.6 million. Evergreen tried to exchange some notes for new debt and “ultimately was unable to implement any alternative remedy to its financial condition,” the company said in court papers.
Investors holding more than 70 percent of the company’s convertible senior secured notes have agreed to act as the so- called stalking-horse, or initial bidder, in a proposed auction for Evergreen’s assets, including new technology to make solar wafers at lower cost, Evergreen Chief Executive Officer Michael El-Hillow said in court papers.
The increasingly crowded market forced Evergreen to close its much-touted but short-lived Massachusetts factory and relocate manufacturing to China, and resulted in the virtual disappearance of its once-lofty stock market value.Evergreen said it will cut another 65 jobs across the U.S. and Europe and suspend activities at its Midland, MI facility as part of its restructuring. Evergreen is planning to focus more on producing solar wafer technology for other companies to use in solar cell and module products. As part of the shift, Evergreen will have about 85 workers in its Wuhan, China site focused on the wafer development.
“Since January, Evergreen Solar has been aggressively repositioning itself to fully leverage the potential our String Ribbon wafers can bring to high volume solar cell and module manufacturers as these customers are facing severe pressure to further reduce their total cost of manufacturing and particularly their wafer supply costs. The actions we are taking today enable the continued development of an industry standard wafer using Evergreen’s differentiated technology and thereby provide the lowest cost wafer to the growing solar industry,” Evergreen Solar president and CEO Michael El-Hillow said
The company cited several market conditions that have impacted business, including a drop in silicon pricing, significant global capacity expansion and an end to industry subsidies in Germany and other key markets. The company also blamed the bankruptcy on increased competition from government-subsidized solar-panel makers in China and the failure of the U.S. to adopt clean-energy policies.
Prices for solar panels fell in 2010 and 2011 because of “massive overcapacity” in the industry at a time of lower subsidies, El-Hillow said in court papers. The global production capacity of photovoltaic plants jumped 139 percent to 18.2 gigawatts in 2010.
In fact, since 2010, Evergreen has been the worst-performing company on the Bloomberg Global Leaders Solar Index. Solar-energy equipment makers are being hurt by excess capacity, the cutback of subsidies in Europe and increased competition from manufacturers in China, Moody’s Investors Service said.