Energy Conversion Devices Files Chapter 11, Seeks Sale
Energy Conversion Devices, Inc. (ECD), a provider in materials science and renewable energy technologies, voluntarily filed a petition for relief under Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Michigan.
As part of its bankruptcy plan, ECD intends to sell through separate sales its wholly owned operating subsidiary United Solar Ovonic LLC (USO) and other assets, including its minority stake in Ovonyx, Inc. The company has received support for its operating and divestiture plan pursuant to a formal Plan Support Agreement executed by the company with holders of approximately 70% of the company’s $263.2 million in outstanding 3% Convertible Senior Notes due 2013.
USO, which will continue to operate during the sale process, has also voluntarily filed a petition for relief under Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Michigan. USO is the global provider in manufacturing flexible, lightweight thin-film photovoltaic (PV) products for use in the commercial rooftop and building-integrated markets. USO’s Open Solar initiative has begun to show traction with new partnerships resulting in an integrated roofing product with Marcegaglia in Italy, and consumer products including the award-winning SolarKindle cover for the Kindle e-reader.
“We firmly believe there is a strong and sustainable commercial market for UNI-SOLAR products. USO’s next-generation, 12% efficient, flexible PV products build upon 25 years of PV experience and enable highly competitive production costs with a fundamentally differentiated product. However, our current capital structure and legacy costs are preventing USO from making the investments necessary for the future of the business without restructuring through the bankruptcy process,” said Julian Hawkins, ECD’s president and ChCEO. “The processes we initiated today will afford greater opportunity for ECD to maximize value for its stakeholders and conduct an orderly sale of USO to ensure it is viable and successful for the long-run.”
The company has retained the investment banking firm Quarton Partners, LLC to manage the sale process, which is expected to be completed in 90 days.
On February 13, ECD sold its majority owned subsidiary, Ovonic Battery Company, Inc. (OBC), to BASF Corporation for the purchase price of $58 million in cash before transaction fees, minority participations, and working capital and other adjustments. OBC is the inventor and worldwide licensor of nickel-metal hydride rechargeable battery technology and is pursuing advanced battery technologies, including cathode materials for lithium-ion chemistry batteries.
Solar Integrated Technologies, Inc. (SIT), a U.S.-based wholly owned subsidiary of ECD, has voluntarily filed a petition for relief under Chapter 7 in the U.S. Bankruptcy Court for the Eastern District of Michigan in a separate proceeding. SIT is an engineering, procurement and construction management company with solar installations in the U.S. and Western Europe.
ECD has retained Honigman Miller Schwartz and Cohn LLP as legal counsel and AlixPartners as financial advisors to assist the company in the Chapter 11 process.