Evergreen Solar files for bankruptcy and seeks buyer

Polysilicon wafer manufacturer owes creditors $485m after failing to build on early success or match Chinese competitors

US manufacturer Evergreen Solar yesterday filed for bankruptcy, blaming competition from cheaper Chinese rivals and cuts to clean energy subsidies.

The maker of thin polysilicon wafers announced earlier this year it would need a cash injection after recording first-quarter sales well below expectations.

The company was forced to close its manufacturing plant in Devens, Massachusetts, with the loss of 800 jobs, and prospects looked bleaker still when it failed to reach a deal to restructure its debt that would have made raising capital easier.

Evergreen was popular with investors in 2007 and 2008 because it used far less polysilicon, then priced at almost 10 times today’s levels, than its rivals.

But the value of silicon fell dramatically and previously growing solar markets in Italy and Germany slowed as subsidies were cut, meaning global solar panel supplies increased and prices dipped. Evergreen was hit particularly hard – the price of its solar wafers plunged by 35 per cent this year.

The company now plans to sell itself at auction to raise the $485.6m needed to pay its creditors.

Documents filed yesterday show existing investors have launched a ‘stalking horse’ bid of $165m, while Evergreen is marketed to potential buyers, possibly including competitors such as Renesola, LDK Solar or Norway’s Renewable Energy Corp.

In contrasting news, rival US photovoltaic cell manufacturer Ascent Solarhas announced that it has signed a $450m deal to set up new facilities in Asia.

The company had lost 64 per cent of its value over this year, but its shares more than doubled on the Nasdaq yesterday morning after the announcement was made.

Ascent agreed to sell a fifth of its shares to Chinese firm TFG Radiant Group as part of a deal that will see the two companies establish a Chinese manufacturing facility with an annual production capacity of 100MW.

The US firm will receive royalties on sales from products produced at the plant and receive up to $250m in licence fees and milestone payments if certain production and cost goals are met.

Ascent retains rights to sell its panels in other countries and will also build a production facility in Colorado, as it looks to concentrate on specialty markets, such as military and defence, off-grid charging in developing countries and integrating its panels on the roofs of buses, trucks and trains.

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