Evergreen Solar Files for Bankruptcy

Massachusetts-based solar manufacturer Evergreen Solar  (NasdaqCM: ESLR) filed for bankruptcy on Monday after a long slide down from its 2007 high water mark that saw the company’s stock top out above $113 per share.

In those early years of the solar industry, Evergreen’s  proprietary "string ribbon" solar cell fabrication process made it an industry leader. The process reduced the cost of solar panels because making them required less polysilicon. 

Since then, the solar industry has changed dramatically. When Evergreen went public, there were only a handful of quoted solar companies, now there are at least 50.

Supplies of polysilicon have increased steadily with matching declines in cost, taking away Everygreen Solar’s primary advantage in the market.

At the same time, China’s solar manufacturing went into overdrive, reaching economies of scale and beating out western competitors on per-watt costs. 

Decreasing European solar subsidies and a global oversupply of panels marked the beginning of the end for Evergreen.

With solar cell prices at all-time lows and dropping further, in January 2011, Evergreen gave up on manufacturing in the US, announcing its intent to shut down a state-of-the-art plant in Devens, Massachusetts that was less than two years old.

The company moved its manufacturing to China in 2009, but the writing on the wall was obvious. 

In April, company executives warned investors they would need to raise cash soon, but they were unable to restructure debt with bondholders, making it difficult to secure additional capital. 

In court records filed Monday, the company says it has assets worth $424.5 million and debts of $485.6 million. 

A large solar cell maker like Norway’s REC (REC.OL) or China’s LDK Solar (NYSE: LDK) could move in to buy Evergreen’s technology at an enormous discount. 

Major shareholders in Evergreen include Vanguard Group, Korea’s OCI Co., and Aristeia Capital. 

On Tuesday afternoon the company’s stock price was $0.16 per share.

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