Loss-making and highly leveraged Evergreen Solar is to attempt a detailed financial recapitalization to reduce the company’s outstanding indebtedness and annual interest expense, while raising US$40 million. A 1-for-6 reverse stock split has also been approved as well as an increase in shares of common stock from 120 million to 240 million. Evergreen Solar said it planned to hold a Special Meeting of stockholders in early 2011 to gain support for the recapitalization plan.
At the end of the third quarter, Evergreen Solar had approximately US$93 million of cash and cash equivalents, and approximately US$6.7 million in restricted cash. However, the company expected to need approximately US$56 million in the fourth quarter.
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Executives hinted in Evergreen’s most recent quarterly conference call that management were continuing to look at opportunities to restructure though no details were then provided.
The company has frequently raised cash over several years and is transitioning manufacturing of modules to include China. However, the company needs to demonstrate 2 sequential quarters of profitability in China before Chinese banks would be interested in lending money to the enterprise.
