Evergreen Solar Files Chapter 11 - Analyst Blog
16 8월 2011 - 8:39PM
Zacks
Evergreen Solar Inc. (ESLR) announced that it
had voluntarily filed a petition for relief under Chapter 11 of the
U.S. Bankruptcy Code. The company has been on a slippery slope over
the past two years.
Evergreen Solar faced with a market flooded with cheap Asian
competition, continued to register losses. The company tried to
stem the tide by relocating its manufacturing base from its high
cost Massachusetts factory to Wuhan, China.
The USP for Evergreen Solar has always been its proprietary
crystalline silicon technology known as String Ribbon, which uses
approximately half the silicon for manufacturing wafers, compared
to peers using the conventional sawing method. However, with the
steep decline in silicon prices, the advantage gradually lost its
shine. Lastly, the pain became worse for the company in recent
times as key markets like Germany and Italy were gradually winding
down their subsidy programs.
Evergreen Solar filed the petition in the U.S. Bankruptcy Court
for the District of Delaware. In conjunction with the Chapter 11
filing, Evergreen Solar stated that it entered into a restructuring
support agreement with certain holders of more than 70% of the
outstanding principal amount of its 13% Convertible Senior Secured
Notes.
Under the restructuring, an entity formed by the note holders,
ES Purchaser LLC, entered into an asset purchase agreement with
Evergreen Solar. ES Purchaser will bid for the assets being sold
under the Bankruptcy Code. If better offers for the assets are not
obtained, ES Purchaser is expected to acquire most of the company's
assets pursuant to the asset purchase agreement.
As part of Evergreen Solar's reorganization activities, the
company will reduce its U.S. and European workforce by about 65
people, including suspension of operations at its Midland, Michigan
filament facility.
However, it’s Wuhan, China manufacturing facility is expected to
continue depending on market demand. At the same time the company
will engage in discussions with its investors in China regarding
the fate of the facility and its sources of financing.
Evergreen Solar engages in the development, manufacturing and
marketing of solar power products worldwide, including solar cells,
panels and photovoltaic systems.
These modules are designed for a range of solar electric power
applications, including water pumping, communications, outdoor
lighting, rural electrification, recreational vehicles and
stand-alone applications. The company sells its products through
distributors, system integrators, and other value-added resellers.
Its products are sold primarily in the U.S. and Europe.
Evergreen Solar currently has a short term Zacks #3 Rank (Hold)
in line with peers like First Solar Inc. (FSLR)
and Energy Conversion Devices Inc. (ENER). Over
the longer run, we maintain our Underperform recommendation on
Evergreen Solar shares.
ENERGY CONV DEV (ENER): Free Stock Analysis Report
EVERGREEN SOLAR (ESLR): Free Stock Analysis Report
FIRST SOLAR INC (FSLR): Free Stock Analysis Report
Zacks Investment Research
Evergreen Solar, Inc. (MM) (NASDAQ:ESLR)
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Evergreen Solar, Inc. (MM) (NASDAQ:ESLR)
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