Massachusetts-based solar firm Satcon Technology Corporation has recently filed for protection under bankruptcy law in a Delaware courtroom, making it the second clean energy company to enter into proceedings in one week. Electric battery maker A123 Systems, also based in Massachusetts, recently filed for bankruptcy protection as well.
Satcon said in its filing that after experiencing financial distress for several years, and exploring all alternatives, Chapter 11 bankruptcy proved the most viable option that would enable the company to reorganize.
“This has been a difficult time for Satcon,” said Satcon president and CEO Steve Rhoades. “After careful consideration of available alternatives, the Company’s Board of Directors determined that the Chapter 11 filings were a necessary and prudent step, allowing the Company to continue to operate while giving us the opportunity to reorganize with a stronger balance sheet and capital structure.”
The firm, which manufactures equipment that converts solar-cell energy for use on power grids, defaulted on a $16 million debt payment for an unsecured subordinated convertible note earlier in October, according to Bloomberg.
The company listed $92.3 million in assets and $121.9 million in debt as of June 30. The company’s largest unsecured creditors include Perfect Galaxy International, which Satcon owes $25.6 million in trade debt, and Heights Capital Management, which holds $10 million in convertible notes, the news source reports.
Similar to A123 Systems, Satcon was approved for two grants from the U.S. Department of State, each of which amounted to $3 million. In an attempt to avoid bankruptcy, Satcon cut 35 percent of its workforce in January, and closed a factory in Canada. The company attributed its financial struggles to the downturn of the solar power industry.