Monday, July 11, 2011

Evergreen Files 8-K After Hours With Status Update ($ESLR)

Evergreen Solar shares were inexplicably up ten percent today. Historically, it has always paid to sell the rips when this thing rallies on no news. [Plus, no action in the bonds.]

True to form, after hours they release this 8-K, Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing, which contained the following:

As previously disclosed, the Company is continuing to aggressively pursue opportunities to address its excess debt and debt service requirements in the near term, including primarily restructuring its existing debt, in order to significantly deleverage and better position it to execute its strategy of developing and supplying the lowest cost industry standard sized wafers to the world’s leading solar panel manufacturers. As part of these restructuring efforts the Company has engaged financial restructuring advisors, and is in discussions with holders of its outstanding convertible notes regarding the terms of a restructuring. The Company can make no assurances that it will be able to successfully restructure its debt, but its current expectation is that, in order to significantly deleverage its balance sheet, any restructuring will involve very significant or complete dilution to the Company’s existing stockholders, leaving them with a very small percentage of the Company’s outstanding common stock, if any.
If the Company does not complete a restructuring of its outstanding indebtedness, to the extent that its cash balance decreases over the next 12 months (the Company’s cash balance on July 2, 2011, the end of its second quarter, was approximately $55.9 million) or it is required to offer to purchase its outstanding notes following a “fundamental change,” or if an event of default otherwise occurs under the indentures governing the Company’s outstanding notes that results in acceleration of the notes, the Company will not have the cash on hand to make the payments required by the indentures and may be forced to declare bankruptcy. If the Company files for bankruptcy protection, it expects current stockholders will receive little or no recovery and, if the Company cannot agree with the holders of its outstanding indebtedness on a plan of reorganization, the Company may be forced to liquidate.
Wow! Not only do they mention bankruptcy but also liquidation. Of course, bondholders are praying for liquidation, and it would be great for them if the company would give up and toss them the keys.

1 comment:

Taylor Conant said...

ESLR is like a comedian who starts his show off saying, "I hate comedy, I am over it. I hate this job and I have nothing funny to tell you so you should all leave right now."

And the crowd laughs at his self-deprecating humor, thinking he's just warming them up for the good stuff.

And he goes, "No, seriously, get out of here. I have nothing. You are going to end up wasting an hour if you don't leave now."

And the crowd laughs a little harder and some of the people call their friends and tell them they've got to rush down and get in before they close the doors because this is just going to be a really funny show.

An hour later, the audience comes out, grumbling and one guy turns around and angrily shakes his fist, "You son of a bitch, you wasted an hour of my life for nothing!"