Friday, March 18, 2011

Evergreen Solar to Delay Pay Back

Evergreen Solar Inc. (Nasdaq:ESLR) expects to have several years to pay back grant money owed to the state in connection with the closing of the company’s factory in Devens, Mass., according to the company’s annual report.

Executives at Marlborough, Mass.-based solar technologies company said on Thursday that they’re only expecting to generate $90 million from the sale of assets in Devens, just a fifth of the $430 million the company paid to open the plant in 2008.

Evergreen Solar had received at least $31 million in direct state support to help open the plant, where the company has produced solar panels, cells and wafers.

Greg Bialecki, the state’s secretary of housing and economy development, has said he expects the state to recover more than half of that amount through clawback provisions in the agreements. But Evergreen has claimed it only owes $4 million, at most.

Bialecki spokeswoman Kimberly Haberlin said Thursday that state officials are “aggressively pursuing recovering all funds owed to the commonwealth and are currently engaged in conversations with the company to that end.”

But it might be a while before the money is paid, Evergreen said in its 2010 annual report filed this week. “Based on our understanding of the grant agreements, we do not believe these amounts will need to be repaid for several years,” the company wrote.

Still, Evergreen said, “we cannot be sure that an adverse determination would not be made if our interpretation of the agreements were challenged.”

Evergreen announced in January that the factory would close — and that the factory’s 800 jobs would be cut — by the end of March. The layoffs are “occurring in phases through the end of the month,” investor relations director Michael McCarthy wrote in an e-mail.

McCarthy said the $90 million sales figure includes both cash generated from unwinding working capital and the sale of assets in Devens.

“That investment was made about three years ago,” he wrote in an e-mail. “When you account for (depreciation and amortization) over the regular course of business and consider that most pieces of equipment are written off over 5-year up to 10-year periods, there are changes in book value.”

McCarthy and other Evergreen executives have not explained how the factory itself, which Evergreen owns, would factor into the assets sale. The land is leased from MassDevelopment, which declined to comment on the plans for the assets sale.

Shares in Evergreen closed down 7 percent on Thursday after the company released its fourth-quarter financials, which included a nearly $400 million operating loss as a result of the Devens shutdown.

Bloomberg reported on Friday that JPMorgan equity analyst Christopher Blansett has downgraded Evergreen’s stock to underweight from neutral.


1 comment:

Robert said...

Closing this plant would be a huge blow to the industry. I hope they get the solar incentive loans worked out. It would be sad for the community and for the industry.