* Solyndra received $535 mln loan guarantee, Obama visit
* Company cutting 1,100 jobs immediately
* Bankruptcy filing likely early next week
* Company raised some $1 bln in venture capital funds
(Adds DOE, Republican lawmaker comments)
By Nichola Groom
LOS ANGELES, Aug 31 U.S. solar start-up
Solyndra LLC, succumbing to pressure from lower-cost Chinese
rivals, said it has suspended operations and plans to file for
bankruptcy, 15 months after President Barack Obama visited a
company factory that was to be expanded with the help of a
federal loan guarantee.
The Chapter 11 filing, expected next week, will make
Solyndra the third U.S. solar company to seek bankruptcy
protection in the last month. Former Wall Street high flyer
Evergreen Solar Inc ESLRQ.PK filed for Chapter 11 two weeks
ago, followed four days later by SpectraWatt Inc, a private
company that was backed by Intel Corp (INTC.O).
U.S. Representative Henry Waxman of the House Committee on
Energy and Commerce said the bankruptcies "are unfortunate
warnings that the United States is in danger of losing its
leadership position in the clean energy economy of the future
... We should be doing everything possible to ensure the United
States does not cede the renewable energy market to China and
In a press release on Wednesday, Solyndra said it could not
compete with bigger overseas rivals. Earlier this year, cuts to
generous solar subsidies in No. 2 market Italy stalled
development of solar projects and led to a global glut of solar
panels that sparked a 25 percent drop in prices.
Even industry heavyweights such as China's Suntech Power
Holdings Co Ltd STP.N and U.S.-based First Solar Inc (FSLR.O)
are struggling with dwindling profits, while small,
up-and-coming solar companies are finding it increasingly
difficult to stay afloat. [ID:nN1E77O11T]
Solyndra said it was evaluating options, including a sale
of the business and licensing its copper indium gallium
selenide (CIGS) technology.
About 1,100 employees are being laid off immediately, it
said in a statement.
A company spokesman said the bankruptcy filing would likely
come early next week in Delaware.
Solyndra simply could not compete with "Chinese firms that
have received billions of dollars in low-cost loans from state
banks and have access to a well developed domestic supply chain
for solar manufacturing," GTM Research analyst Shyam Mehta
said. The company's relatively unproven CIGS technology was
another key reason for its demise, he added.
"Solyndra has been swimming upstream ever since it entered
the market," Mehta said.
The announcement is the latest in a series of
disappointments for Solyndra, whose fall from grace has been
tracked closely because it received a $535 million loan
guarantee from the U.S. Department of Energy in 2009.
The company also made headlines in May 2010 when Obama paid
a visit to the company's Fremont, California, factory.
Solyndra was the first company to receive a loan guarantee
under an advanced clean energy program created in 2005. The
Energy Department came under criticism last year when the
company postponed plans to expand the Fremont factory, cut jobs
and withdrew plans for an initial public offering.
At the time, U.S. firms were just beginning to smart from
the rapid influx of cheap solar panels from China.
"We have always recognized that not every one of the
innovative companies supported by our loans and loan guarantees
would succeed, but we can't stop investing in game-changing
technologies," DOE Director of Public Affairs Dan Leistikow
said in a blog post on Wednesday on the DOE Website.
Still, Republican lawmakers said Solyndra was a bad bet
from the start.
"We smelled a rat from the onset," Representatives Fred
Upton of the Energy and Commerce Committee and Cliff Stearns of
the Oversight and Investigations Subcommittee said in a joint
statement. "In this time of record debt such disregard for
taxpayer dollars cannot be tolerated."
The Energy and Commerce committee has been probing
Solyndra's loan guarantee since early this year, and in July
subpoenaed White House documents related to the loan.
Solyndra received some $1 billion in venture capital funds
from investors including CMEA Ventures, Argonaut Ventures,
Madrone Partners, Redpoint Ventures, funds affiliated with
RockPort Capital Partners, and U.S. Venture Partners.
Prior to Solyndra, Evergreen Solar was the most
high-profile U.S. solar company to collapse. Evergreen was once
at the forefront of U.S. renewable energy technology and had
planned to produce its solar wafers in Massachusetts.
Ultimately, even a plan to shift manufacturing to Asia could
not save it. [ID:nN1E77E0X0]
Solyndra had revenue of $140 million in 2010 and had said
it planned to produce 300 megawatts of solar panels this year.
(Reporting by Nichola Groom; Additional reporting by Braden
Reddall in San Francisco; Editing by Lisa Von Ahn, Steve
Orlofsky, John Wallace and Gunna Dickson)