Evergreen Solar Inc., the once promising alternative energy company that received millions in state subsidies, warned late Monday that its shares will likely be worth little or nothing even if it is able to strike a deal with creditors to restructure its debt.
The Marlborough solar cell maker, which shut its manufacturing plant in Devens in March, said in a regulatory filing that it is continuing negotiations with creditors, but warned it was in danger of running out of cash. Evergreen’s stock fell to 41 cents from 61 cents per share yesterday. In early 2008, Evergreen shares traded at more than $100.
To reach an agreement that would relieve some of its debt, Evergreen said in the filing that it believes it will have to significantly dilute the stock of existing shareholders “leaving them with a very small percentage of the company’s outstanding common stock, if any.’’ Shareholders could also be wiped out if the company can’t reach a deal and is forced into bankruptcy.
In addition, the company said it is in danger of being kicked off the Nasdaq stock exchange early next year because its stock has been trading below $1. If delisted, Evergreen said it could be forced into bankruptcy.
Evergreen warned in May that there was substantial doubt about its ability to continue operating through the next 12 months. The company had burned through more than $30 million in cash in the first quarter and had just $33 million left at the end of April. The company now has a stock market value of only $16 million.
Evergreen spokesman Michael McCarthy said the latest warnings are consistent with its previous statements to investors. He said the company plans to report second-quarter earnings in early August.
Three years ago, Evergreen opened a gleaming 450,000-square-foot manufacturing plant in Devens, a former military base in central Massachusetts, promising to create hundreds of new jobs. Governor Deval Patrick’s administration awarded the company $58 million in tax breaks and other aid, one of the largest state incentive packages in recent years, to help persuade Evergreen to expand here and jump-start the state’s alternative energy sector.
But Evergreen struggled to keep up with cheaper competition in China, where labor costs are far lower. Evergreen eventually shut the plant, eliminating 800 jobs. The company said it wound up losing money on every solar panel it made in Massachusetts as prices plummeted because of increased global competition and tepid demand in the wake of the economic slowdown.
State officials cut off the company’s tax breaks in May and said they plan to send the company a retroactive property tax bill for $1.5 million for the latest tax year. In addition, Massachusetts officials say they hope to recover at least $3 million of the $21 million the firm received in direct grants, despite Evergreen’s financial troubles.
“Our negotiations with Evergreen are active and ongoing and we remain committed to recovering all the funds owed to the Commonwealth,’’ said Kimberly Haberlin, a spokeswoman for the state’s economic development agency.
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