Satcon Technology files for bankruptcy

Wed Oct 17, 2012 12:00pm EDT

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(Reuters) - Money-losing solar inverter maker Satcon Technology Corp filed for bankruptcy protection on Wednesday, squeezed by falling demand after top consumer Europe lowered subsidies for renewable energy.

Shares of the company, which had a market value of $6.32 million as of Tuesday close, fell 77 percent to 7.3 cents in morning trade on the Nasdaq. The company has lost 93 percent of its market value since the beginning of the year to Tuesday.

Germany's SMA Solar, the world's No. 1 maker of solar inverters, said last month that demand for its inverters was weak in the third quarter following the subsidy cuts.

Average selling prices for inverters have fallen by about a fifth this year.

Satcon, which makes inverters that help feed solar-generated power into the grid, said in January that it would cut about 35 percent of its workforce and close its Canadian plant.

The Boston, Massachusetts-based company has reported a loss for 22 consecutive quarters.

"The underlying problem for Satcon was that even during boom times in the solar industry, the company was never able to sustain profitability," said Raymond James analyst Pavel Molchanov.

Pavel said things are nowhere near as bad for inverter companies as they are for solar module makers.

"For one, competition from China is negligible. There is also less overcapacity, and margins tend to be higher," he said.

Satcon, which primarily caters to the large-scale commercial and utility-scale solar photovoltaic markets, said in its Chapter 11 filing that it had assets of $92.3 million and liabilities of $121.9 million as of June 30.

The company had $2.99 million in cash and equivalents and debt of $29.84 million as of June 30.

MORE EXITS?

Satcon joins a clutch of U.S. solar companies that have filed for bankruptcy. Solyndra LLC and Evergreen Solar Inc have sought bankruptcy protection, while Abound Solar filed for Chapter 7 liquidation in July.

"There will be more players exiting this space, whether you are talking about panel manufacturers, resellers or distributors," said Capstone Investments analyst Carter Driscoll.

"You are going to see consolidation on all levels of the solar supply chain."

A research report released on Tuesday said 60 percent of existing solar suppliers are expected to get edged out between 2012 and 2014.

The case is In re: Satcon Technology Corp, U.S. Bankruptcy Court, District of Delaware, No: 12-12869. (Reporting by Swetha Gopinath in Bangalore; Editing by Sriraj Kalluvila)

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