Evergreen Solar Inc., the Massachusetts clean-energy company that received millions in state subsidies from the Patrick administration for an ill-fated Bay State factory, has filed for bankruptcy, listing $485.6 million in debt.
Evergreen, which closed its taxpayer-supported Devens factory in March and cut 800 jobs, has been trying to rework its debt for months. The cash-strapped company announced today has sought a reorganization in U.S. Bankruptcy Court in Delaware and reached a deal with certain note holders to restructure its debt and auction off assets.
The Massachusetts Republican Party called the Patrick administration’s $58 million financial aid package, which supported Evergreen’s $450 million factory, a “waste” of money.
“The bankruptcy of Evergreen Solar is another sad event for the Massachusetts company and highlights the folly of the Patrick-Murray Administration which has put government subsidies into their pet projects instead of offering broad based relief to all Bay State employers,” said Jennifer Nassour, head of the state GOP.
Greg Bialecki, Patrick’s economic development czar, defended the administration’s support for the once-promising Evergreen. The state is still trying to recoup about $4 million in cash from the Marlboro-based company.
“Not every company is going to be successful … but we still believe the approach of providing business incentives to create and maintain manufacturing jobs in Massachusetts is an important strategy,” he said.
Evergreen – hurt by lower-cost competition in China and plummeting prices for solar panels – also said it will cut more jobs – 65 layoffs in the United States and Europe, mostly through the shutdown of its Midland, Mich., manufacturing facility. That would leave Evergreen with about 68 workers according to a head count listed in the bankruptcy filing.
To cut costs, Evergreen shifted some of its production to Wuhan, China, last year. That joint venture will remain operating subject to financing talks with Chinese investors.
In January, after Evergreen announced it would close the Devens factory, Patrick told the Herald he was disappointed in the job losses but did not regret making the investment.
“I think we did what we could have and should have,” he told the Herald.
In March, during a state Senate hearing that explored the value of tax incentives for Bay State businesses, Evergreen CEO Michael El-Hillow said the company had “earned” 85 percent of the taxpayer benefits it received because of the jobs it originally created.
Evergreen warned investors back in April that it was burning through cash because of slow sales, falling solar-panel prices and weak proceeds from the sale of Devens factory assets.
“Chapter 11 will provide Evergreen Solar with the ability to maximize returns for our stakeholders through the proposed sale process,” El-Hillow said in a statement. “Importantly, we expect to continue our technology development without interruption during Chapter 11 and the sale process.”
But Evergreen shareholders are expected to receive “no distributions” from the asset sales after creditors are repaid.
Shares of Evergreen, which are in danger of delisting from the Nasdaq Stock Market, plunged 57 percent today to 18 cents. The company launched in 1994 and went public in 2000.
The list of top creditors in today’s bankruptcy filing lists a $1.5 million debt to MassDevelopment, the quasi-public state economic development agency.