Solyndra to Declare Bankruptcy

[kshillbillys]

President Obama touted the facility only a year ago.

Update: Solyndra announces it plans to file Chapter 11 bankruptcy, is suspending operations and seeks a reorganization.
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Solyndra, a major manufacturer of solar technology in Fremont, has shut its doors, according to employees at the campus.

"I was told by a security guard to get my [stuff] and leave," one employee said. The company employs a little more than 1,000 employees worldwide, according to its website.
Shortly after it opened a massive $700 million facility, it canceled plans for a public stock offering earlier this year and warned it would be in significant trouble if federal loan guarantees did not go through.

The company has said it will make a statement at 9am California time, though it's not clear what that statement will be. An NBC Bay Area photographer on the scene reports security guards are not letting visitors on campus. He says "people are standing around in disbelief." The employees have been given yellow envelopes with instructions on how to get their last checks.

Solyndra was touted by the Obama administration as a prime example of how green technology could deliver jobs. The President visited the facility in May of last year and said  "it is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. And you guys all represent that. "

The federal government offered $535 million in low cost loan guarantees from the Department of Energy. NBC Bay Area has contacted the White House asking for a statement.

Some Republicans have been very critical of the loans.  "I am concerned that the DOE is providing loans and loan guarantees to firms that aren't capable of competing in the global market, even with government subsidies"  Florida Congressman Cliff Stearns told the New York Times.

[kshillbillys]

Taxpayers Rank Behind Solyndra Investors Under Obama Deal
September 03, 2011, 1:31 PM EDT
(Updates to indicate no immediate response from Solyndra in seventh paragraph.)

Sept. 3 (Bloomberg) -- The Obama administration let $385 million in taxpayer support for Solyndra Inc. take a back seat to funds from new investors in an unsuccessful effort to keep the solar-panel manufacturer operating.

The Energy Department decided the January refinancing represented the "highest probable net benefit" for the government, according to a government document obtained by Bloomberg News. Investors provided the company $75 million that became senior debt, ahead of all but $150 million of the federal government's stake.

Solyndra said on Aug. 31 that it will file for bankruptcy reorganization next week in Wilmington, Delaware. The administration's agreement to subordinate the government aid to new investment may add fuel to criticism by Republicans who have said President Barack Obama spent too much money pushing a favored company in the name of green energy.

"Solyndra is just the latest casualty of the Obama administration's failed stimulus," Republican Representatives Fred Upton of Michigan, chairman of the House Energy and Commerce Committee, and Cliff Stearns of Florida said in an Aug. 31 statement. "We smelled a rat from the onset," they said of the backing for Solyndra.

The company is evaluating options including selling itself or licensing its technology, David Miller, a spokesman for the closely held company, said this week. The company suspended operations, and about 1,100 full-time and temporary employees have been dismissed.

Mounting Troubles

Should the company be liquidated, $385 million owed to the U.S. will be subordinated to the $75 million invested this year, according to the document dated Jan. 3.

Miller didn't return a call and e-mail sent outside business hours seeking comment on the refinancing agreement.

At the time of the January refinancing, the government had already advanced $460 million in loan guarantees and decided to continue investing in an effort to fend off threatened bankruptcy.

The document traces Solyndra's mounting financial troubles and the Obama administration's decision to maintain its bet on the future of the Fremont, California-based company.

By December 2010, "Solyndra had only about a month of cash on hand and faced bankruptcy absent continued funding" from the department, according to the papers.

After "a due-diligence effort" to "determine if the company still had a viable business," the Energy Department concluded it "believes that the restructuring plan represents the best possible course of action to achieve the highest return on its invested capital."

Liquidation Value

The company's liquidation value of its collateral was $91 million to $99 million in December, before the refinancing, which would have provided less than a 22 percent return to the government, the document shows.

By subordinating $385 million of the government loan to $75 million from investors, the government calculated that Solyndra's conservative enterprise value this year would be $240 million to $360 million. At what it considered a more traditional valuation multiple, the government saw the value as $480 million.

The company had tapped into the loan guarantees offered by the Energy Department to build a photovoltaic panel facility and help add 1,000 jobs, according to the papers.

More Collateral

Under the reorganization in January, the company put up more collateral to the government, including intellectual property, according to the U.S. document.

In a liquidation, $385 million of the U.S. investment would be returned at the same time as $175 million in private investments from before the January refinancing, according to the papers. If the company avoids liquidation, the $385 million would remain senior debt.

Solyndra is the third U.S. solar manufacturer to fail in a month as falling panel prices and weak global demand are driving a wave of industry consolidation. The company produces cylindrical panels that convert sunlight into electricity using copper-indium-gallium-diselenide thin-film technology. Standard solar panels are flat.

Five U.S. companies have been awarded $1.56 billion in guarantees through a program championed by Obama, who visited Solyndra's factory in May 2010.

The House Energy and Commerce Committee has been probing Solyndra's loan guarantee and in July issued a subpoena to the White House Office of Management and Budget for documents relating to all Energy Department loan guarantees.

Obama Contributor

In a Sept. 1 letter requesting all documents on White House House communications with Solyndra, its board and investors, the lawmakers said "a major investor in Solyndra, George Kaiser, was a bundler for President Obama's 2008 campaign."

The George Kaiser Family Foundation, a charitable organization based in Tulsa, Oklahoma, and backed by donations from Kaiser, holds about 35.7 percent of the company, according to a Solyndra filing with the Securities and Exchange Commission

Kaiser raised, or bundled, $50,000 to $100,000 for Obama's 2008 campaign, according to a list that had been posted on Obama's 2008 campaign website. He gave $2,300 personally, according to the Federal Election Commission.

"George Kaiser is not an investor in Solyndra and did not participate in any discussions with the U.S. government regarding the loan," the foundation said in an e-mailed statement. The foundation said it "invests in a globally diversified portfolio across many different asset classes."

Selection of companies to receive U.S. backing are "merit- based decisions made by career staffers at the Department of Energy, and the process for this particular loan guarantee began under President George W. Bush," Eric Schultz, a White House spokesman, said in an e-mailed statement Sept. 1.

"Every project that receives financing through the Energy Departments goes through a rigorous financial, legal and technical review process," Schultz said.

[Anmar]

I drive by the factory every day,  its huge.  I bet the really bit off more than they can chew. 

I think the worst part of all of this is that there are people who are happy to see Solyndra fail.  The right is so overjoyed that alternative energy is failing that they don't realize this is another 1000 jobs that we'll lose to an overseas company and more oil money for foreign countries.

[srkruzich]

IF it was profitable they would have succeeded especially with that much startup money.  Sorry but solar is not going to be the resource of the future.   

[sodbuster]

I have solar energy. I produce more than I use. Yet I still have a $20 per month bill, due to the fact that once my bill gets to zero the rest of what I provide is free to the utility company. There are also other charges and the rate credit that I get that make me have a $20 bill. When my system is producing free energy for the grid I let my neighbors connect for free. The $20 is worth it for not giving it away to the energy co. Still I pay much less than what I would if I got it from the grid. The $20 is worth it for reducing the amount of we get from foreign and polluting sources. Solar doesn't work for everyone, but it works for me.

Now for my comments on Soyndra. The fact they went bankrupt and received a huge loan from the government will result in lawsuits. The fact that they got the loan less than a year ago will should violate bankruptcy laws. They did not give the required 60 day notice prior to laying off that large of a number of employees. Very bad decision on the governments part. Unfortunately, I don't think they will suffer many consequences. Just a bad deal all around.

David

[sodbuster]

The FBI has confirmed to ABC News that federal agents are conducting a search this morning at the offices of Solyndra, the now-bankrupt California solar power company that received $535 million in federal loans under a green energy program touted by President Obama.

http://abcnews.go.com/Blotter/fbi-raids-connected-energy-firm-solyndra/story?id=14473051

David

[Anmar]

Saw them out there this morning,  all kinds of press vans outside too.  Should get interesting