Orlando, FL 2/14/12 (StreetBeat) – Lightweight solar product maker Energy Conversion Devices Inc (Nasdaq: ENER) filed for bankruptcy protection on Tuesday, the latest in a string of solar companies that have collapsed in an industry shakeout.The company, whose filing came after years of losses and months of public discussions with bondholders, said it would sell its United Solar Ovonic unit and other assets in bankruptcy.
Energy Conversion, whose products are used for rooftops and buildings, said it would continue to operate during the sale process.
Shares were down 78 percent, or $1.16, at about 30 cents in morning trading on Nasdaq.
The company's failure is the fourth major bankruptcy for the industry in the past year. Evergreen Solar Inc, Solyndra and SpectraWatt have also sought Chapter 11 protection.
Energy Conversion struggled to keep costs down as prices on solar panels fell, due in part to Italian and German government subsidies. The company temporarily suspended manufacturing of its lightweight solar products last fall and said it would cut 500 jobs. Its bondholders hired advisers last fall as problems for the company worsened.
Energy Conversion filed for bankruptcy in Michigan where it is based, saying that holders of about 70 percent of its $263.2 million in 3 percent convertible senior notes due 2013 supported its proposed operating and sales plan.
That plan will essentially keep the flexible, lightweight thin-film photovoltaic product business operating while shedding its debt and other legacy costs. It is used in roofs and also consumer products, such as a solar cover for the Amazon.com's Kindle E-reader. It expects to complete the unit's sale in 90 days.
It also said it sold its Ovonic Battery Company, which licenses advanced battery technology, to BASF Corp. for $58 million. It had first announced that sales process in July.
The company plans to sell its 39 percent stake in Ovonyx, a semiconductor technology company, other intellectual proper and some fixed assets.
Its bondholders include Sanders Morris Harris, Angelo Gordon & Co., Diamondback Capital and Wolverine Asset Management among other creditors, according to court documents.
According to those documents, Energy Conversion had both assets and liabilities in the $100 million to $500 million range when it filed.
In addition to the Chapter 11 filing of the United Solar Ovonic unit, the company also filed a Chapter 7 bankruptcy case for Solar Integrated Technologies, which does engineering, procurement and construction of solar technology.
The company does not expect to be able to pay back all creditors through the plan and that shareholders will likely be wiped out.
The case is in re Energy Conversion, U.S. Bankruptcy Court, Eastern District of Michigan, No. 12-43166.
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