Originally published on September 8, 2011.
Keywords: solar, manufacturer, Solyndra, restructurings, lenders, investors,
The recent bankruptcy filing by California-based solar manufacturer, Solyndra, should be causing concern among both lenders and investors in the developing solar industry. Solyndra received a Department of Energy (DOE) clean energy loan guarantee in September 2009 and earlier this week filed for Chapter 11, citing slowing demand and stiff competition from China as some of the reasons for its decision to cease operations.
In the last month alone, a total of three US solar panel manufacturers closed their facilities. Many are predicting Solyndra will not be the only company that received a DOE guarantee to end up in workout or Chapter 11 this year, which means lenders and investors need to ensure they are preparing for what may be complicated restructurings. Intercreditor disputes, governmental and political intransigence, and potential tax subsidy recapture liability may all combine in these cases in ways difficult to foresee.
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