In a move, not unexpected, ATS Automation Tooling Systems, PV module manufacturing subsidiary, Photowatt France, is planning to file for bankruptcy in the French Courts after cutting production last month after attempts to find a buyer proved unsuccessful. ATS Automation said that it hoped the move would lead to a "recovery process" in which potential buyers may be found and jobs retained.
However, ATS noted that it received a non-binding letter of intent for the purchase of an ATS-owned building in France that formerly housed PWF module assembly operations. Should the sale proceed as expected the proceeds would go to offset cash outflows that would result from the bankruptcy process.
Management expects that, if completed, the proceeds from these opportunities will offset the go-forward losses and cash outflows that will result from the bankruptcy process.
Small PV manufacturers have been faced with rapidly falling prices and stiff competition, especially in mainstream European markets.
ATS said that it had re-examined the spinoff alternative originally planned over a year-ago but said this would not be a viable option including other options. Filing for bankruptcy had therefore become necessary.
"Having explored all separation avenues, ATS will support PWF and its employees through a potential recovery process," commented Anthony Caputo, ATS Chief Executive Officer. "We plan to separate the PWO solar assets within the next six months. Looking forward, in terms of creating value, we have a solid core business, we are growing organically and through acquisition and are positioned to continue to execute our strategy."
ATS expects to record impairment charges and write-offs totalling US$64 million related to PWF operations, including US$24 million of charges related to the termination of certain silicon and wafer supply agreements and other charges related to inventories, silicon deposits, and other PWF assets.
ATS said that it had also initiated a formal sale process for Photowatt Ontario.