Evergreen Solar warns it may go out of business
Evergreen Solar Inc., which has closed its factory in Devens, warned today that it is low on funds and in danger of going out of business.
In a securities filing today Evergreen said there is "substantial doubt" about its ability to "continue as a going concern" over the next 12 months, in part because it had "significant" cancellations for its products. It also said the market for solar products was worsening.
Evergreen also expects to get less than it had hoped from the liquidation of the Devens facility, the financial documents show. The company, which burned through more than $30 million in cash in the first quarter of 2011, had just $33 million left at the end of April.
An Evergreen spokesman could not be reached late today.
The company has struggled financially for several years, trying to compete with cheaper manufacturers in China. But those efforts were hampered by larger issues of both falling demand and prices within the solar industry. Evergreen said today there was a "continued rapid deterioration" in both demand for solar products, and selling prices that contributed to its declining condition.
It reported a $33.4 million net loss for the first quarter of 2011, compared to a $24 million loss for the same period last year.
In March, Evergreen shut its Devens manufacturing facility at the former military base and eliminated 800 jobs. The company has expanded its manufacturing operations in China, where it has received financial support from the government, and where productions costs are also much lower. It continues to operate a filament plant in Michigan.
As a result of the Devens closing, the state of Massachusetts initiated elimination of a property tax break it gave the company to help build the plant there.
The Massachusetts Development Finance Agency board, which originally approved the tax incentive in 2007, voted today to ask another state body to terminate the 20-year tax break early. The Economic Assistance Coordinating Council is expected to act on the request by the end of next month.
The property tax break was a key piece of a $58 million incentive package the Patrick administration awarded Evergreen Solar to build the plant in Massachusetts. In exchange for the property tax break, the Marlborough-based company promised to retain 310 existing jobs and add 350 new ones. Evergreen initially wound up adding even more jobs than promised, but then shut the plant after finding it couldn't compete with cheaper manufacturing in China.