Photo: Wikimedia Commons
Another solar cell manufacturer has filed for bankruptcy.SpectraWatt cited falling prices and stiff competition, particularly from Chinese competitors.
Evergreen Solar cited the same factors in its bankruptcy filing earlier this month, highlight the fact that the combination of lower labour costs and more robust government support enjoyed by Chinese manufacturers in this space presents a substantial challenge to U.S. competitors.
Like Evergreen Solar, SpectraWatt apparently took steps to right its cost structure but was simply too late.
The company shut down a manufacturing plant in April, laying off 117 workers.
However, absent a technological advantage, both Evergreen Solar and SpectraWatt fell victim to relentless downward pricing pressure that made it impossible to achieve consistent profitability.
Bloomberg notes that prices for solar cell panels were down by more than a third this year.
Interestingly it appears that the company’s advisors are pushing forward with an expedited sale process in part due to their belief that, as chief restructuring officer Brad Walker opined: “there is a high likelihood that a significant amount of used solar cell manufacturing equipment and related assets will flood the market and drive down the value of the debtor’s assets.” Those within the industry are clearly anticipating more filings.
SpectraWatt, which received $50 million in funding after it was spun off from Intel in June 2008, listed liabilities of $38.7 million against assets of $33.9 million.
About the author:
David Johnson is a partner with ACM Partners, a boutique financial advisory firm providing due diligence, performance improvement, restructuring and turnaround services to companies and municipalities. He can be reached at 312-505-7238 or at [email protected].