* Filing comes amid solar shakeout
* Company plans to sell units separately
* Says 70 percent of bondholders support plan
Feb 14 Lightweight solar product maker
Energy Conversion Devices Inc filed for bankruptcy
protection on Tuesday, the latest in a string of solar companies
that have collapsed in an industry shakeout.
The company, whose filing follows years of losses and months
of public discussions with bondholders, said it would sell its
United Solar Ovonic unit and other assets in bankruptcy.
Energy Conversion, whose solar laminate products are used
for panels on rooftops and buildings, said it would continue to
operate during the sale process.
It shares were down nearly 80 percent to about 30 cents in
morning trading on Nasdaq. Other solar industry companies
were also trading lower. First Solar, for instance, was
off 9 percent at $28.11 on Nasdaq, and Suntech Power was
down 7 percent at $3.47 on the New York Stock Exchange.
Energy Conversion's failure is the fourth major bankruptcy
in the industry in the past year. Evergreen Solar Inc
, Solyndra and SpectraWatt have also sought Chapter 11
Energy Conversion struggled to keep costs down as prices on
solar panels fell, due in part to government subsidies to the
company's Italian and German rivals. The company temporarily
suspended manufacturing of its lightweight solar products last
fall and said it would cut 500 jobs. Its bondholders hired
advisers last fall as the company's problems worsened.
"Ultimately, their cost structure has been deemed
unsustainable for a while, and the effects of the market in 2011
just exacerbated it," said Shayle Kann, a solar analyst with GTM
Energy Conversion filed for bankruptcy in Michigan, where it
is based. It said holders of about 70 percent of its $263.2
million of 3 percent convertible senior notes due 2013 support
its proposed operating and sales plan.
That plan will essentially keep the flexible, lightweight
thin-film photovoltaic product business -- its United Solar
Ovonic unit -- operating while shedding debt and other legacy
costs. The product is used in roofs and also consumer products,
such as a solar cover for Amazon.com's Kindle E-reader. Energy
Conversion expects to complete the sale of the unit in 90 days.
The company plans to sell its 39 percent stake in Ovonyx, a
semiconductor technology company, other intellectual property
and some fixed assets.
It also said it had sold its Ovonic Battery Co, which
licenses advanced battery technology, to BASF Corp for $58
million. It first announced that sale process in July.
Its bondholders include Sanders Morris Harris, Angelo Gordon
& Co., Diamondback Capital and Wolverine Asset Management, among
other creditors, according to court documents.
According to those documents, Energy Conversion had both
assets and liabilities in the range of $100 million to $500
million range when it filed for bankruptcy.
In addition to the Chapter 11 filing of the United Solar
Ovonic unit, the company also filed a Chapter 7 bankruptcy case
for Solar Integrated Technologies, which does engineering,
procurement and construction of solar technology.
The company does not expect to be able to pay back all
creditors and said shareholders will likely be wiped out.
The case is in re Energy Conversion, U.S. Bankruptcy Court,
Eastern District of Michigan, No. 12-43166.