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EVERGREEN SOLAR INC FILES (8-K) Disclosing Other Events, Financial Statements and Exhibits
(Edgar Glimpses Via Acquire Media NewsEdge) Item 7.01. Other Events.
On August 15, 2011, the Company, pursuant to the provisions of the United States
Bankruptcy Code (the "Bankruptcy Code"), filed a voluntary petition (the
"Bankruptcy Filing") in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court") seeking reorganization relief under the
provisions of Chapter 11 of the Bankruptcy Code (the "Bankruptcy Case"). The
Company also entered into a Restructuring Support Agreement (the "Support
Agreement") with certain holders (the "Supporting Noteholders") of its 13%
Convertible Senior Secured Notes due 2015 (the "Secured Notes"). The Support
Agreement was the result of the Company's previously announced negotiations with
the Supporting Noteholders regarding the restructuring of the Company's existing
debt.
As part of the negotiations, the Company had previously provided the Supporting
Noteholders with certain confidential information about the Company, which may
be deemed material. On August 12, 2011, the non-disclosure agreements that the
Company entered into with the Supporting Noteholders expired and the Company is
required by the terms of such non-disclosure agreements to disclose to the
public via a Current Report on Form 8-K any material non-public information
previously provided to the Supporting Noteholders. This Form 8-K contains any
material non-public information provided to the Supporting Noteholders as
required by the non-disclosure agreements.
A copy of two investor presentations prepared for the Supporting Noteholders
containing such confidential information is attached to this Current Report on
Form 8-K as Exhibits 99.1 and 99.2. A copy of a cash sources and uses table
prepared for the Supporting Noteholders containing such confidential information
is attached to this Current Report on Form 8-K as Exhibit 99.3. A copy of a cash
balance forecast prepared for the Supporting Noteholders containing such
confidential information is attached to this Current Report on Form 8-K as
Exhibit 99.4. In addition to the information contained in Exhibits 99.1 through
99.4, the Company also provided the Supporting Noteholders with information
about certain corporate events as discussed below:
- In anticipation of the Bankruptcy Filing, the Company modified its director
compensation arrangements to eliminate the annual cash retainers paid in advance
to each director and chair of each of the principal committees of the Board of
Directors and eliminate the annual restricted stock grant, and instead pay each
director a fee of $5,000 per month with the chairman of the Board of Directors
receiving an additional fee of $1,200 per month and the chairman of the audit
committee receiving an additional fee of $1,000 per month, so long as they serve
on the Board of Directors or in such chair positions.
- In connection with the Bankruptcy Case, the Company expects to incur fees for
Company and non-Company advisers, including bankers, legal counsel and other
advisers, in the range of $14.0 million to $17.5 million.
- In connection with the Bankruptcy Filing, the Company adopted a key employee
incentive plan, providing for the allocation to key employees of an amount equal
to 5% of gross cash sale proceeds from a third party (i.e. not pursuant to a
"credit-bid" by the Supporting Noteholders pursuant to Section 363(k) of the
Bankruptcy Code or an acquisition vehicle in which management of the Company has
an equity interest of more than 20% or management of the Company has committed
to invest more than $1 million) for the assets necessary for the development and
pursuit of the Company's business plan based on the Company's proposed business
based on industry standard sized String Ribbon wafers for the photovoltaic solar
industry; provided, however, the amount provided in the key employee incentive
plan shall not be less than $1 million.
- On August 10, 2011, the Company began the process of making the interest
payments on its 4.0% Senior Convertible Notes due 2013 (the "Senior Convertible
Notes") and its 4.0% Convertible Subordinated Additional Cash Notes due 2020
(the "Senior Subordinated Notes" and, collectively with the Senior Convertible
Notes, the "4% Notes") originally due July 15, 2011. Shortly after commencing
the payment process, the Company determined not to make the interest payment.
The Company immediately contacted the trustee for the 4% Notes and learned that
the funds had not been allocated to the beneficial owners of the 4% Notes. The
Company understands that as of the commencement of the Bankruptcy Case the funds
had not been transferred to the beneficial holders and has requested the return
of such funds. Despite the request, the funds have not been returned to the
Company as of the date of this filing. The cash balance for the week ended
August 12, 2011, included in Exhibit 99.4 attached to this Form 8-K, was not
reduced by the $4.1 million of cash that was used to commence the process of
funding the interest payment for the 4% Notes.
- Of the Company's cash balance for the week ended August 12, 2011, included in
Exhibit 99.4 attached to this Form 8-K, $3.1 million was held by Evergreen Solar
(China) Co., Ltd., our Chinese joint venture, and is subject to certain
restrictions on repatriation by agreement with our joint venture partner.
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The Company notes that the information set forth in exhibits 99.1 through 99.4
and disclosed above was delivered to the Supporting Noteholders in the past, and
for the purpose of furthering negotiations between the parties. This information
should not be viewed as being current or as presenting a complete disclosure of
the Company's business and prospects. Accordingly, investors should not place
undue reliance on this information.
The information in this Item 7.01, including the exhibits hereto, shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of that section.
This Item 7.01, including the exhibits hereto, contains forward-looking
statements including statements the Company's expectations regarding its
business, revenues, wafer production and process costs, production timing,
competition, market, business strategy, capital requirements and sources of
capital, factory construction, customers, selling prices, and others. These
forward-looking statements are subject to risks and uncertainties which could
cause them to differ materially from those currently anticipated in such
statements. Factors that could cause actual results to differ materially from
those in forward-looking statements include the potential adverse impact of the
Bankruptcy Case on our business, financial condition or results of operations,
including our ability to maintain contracts and other customer and vendor
relationships that are critical to our business and the actions and decisions of
our creditors and other third parties with interests in our Bankruptcy Case; our
ability to maintain adequate liquidity to fund our operations during the
Bankruptcy Case and to fund a plan of reorganization and thereafter, including
maintaining normal terms with our vendors and service providers during the
Bankruptcy Case and complying with the covenants and other terms of our
financing agreements; our ability to obtain court approval with respect to
motions in the Bankruptcy Case prosecuted from time to time and to develop,
prosecute, confirm and consummate one or more plans of reorganization with
respect to the Bankruptcy Case and to consummate all of the transactions
contemplated by one or more such plans of reorganization or upon which
consummation of such plans may be conditioned; our ability to repurchase the
equity interests in our Chinese joint venture held by Hubei Science and
Technology Investment Co., Ltd. ("HSTIC") as required by the agreements
governing the joint venture as a result of our filing for bankruptcy protection
or to negotiate an amendment of those agreements with HSTIC; the uncertainty
involved in forecasting the cost benefits from new technologies, new operational
strategies and operational scaling; the possibility that the Company may be
unable to fund future wafer manufacturing expansions; the significant additional
work required to develop and commercialize the Company's industry standard size
and high performance low cost String Ribbon wafer; technological challenges and
factors beyond the Company's control, such as silicon pricing, that impact its
ability to achieve its wafer cost target of $0.25 per watt in 2013; the
difficulty in raising funding for a pilot production line operation and the
significant further funding required to accomplish commercial manufacturing
expansion; the Company's potential inability to supply the significant volumes
of wafers required in the near-term for potential customers and partners to
qualify its new industry standard size String Ribbon wafers; the uncertainty for
the entire PV solar industry in light of significant worldwide capacity
expansions which may exceed worldwide demand for PV solar products as a result
of various factors including potential significant reductions in subsidies in
key markets like Germany; and other factors contained in the periodic reports
the Company files from time to time with the SEC, including its Annual Report on
Form 10-K, as amended, for the year ended December 31, 2010 and its Quarterly
Report on Form 10-Q for the period ended April 2, 2011. Forward-looking
statements speak only as of the date they are made and the Company disclaims any
obligation to publicly update or revise any such statements to reflect any
change in Company expectations, or in events, conditions or circumstances on
which any such statements may be used, or that may affect the likelihood that
actual results will differ from those set forth in the forward-looking
statements. The materials filed as Exhibit 99.1 through 99.4 hereto were
prepared only for the purpose of providing confidential information to the
Supporting Noteholders and not for any other purpose.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
No. Description
99.1 Investor Presentation dated May 2011
99.2 Investor Presentation dated June 2011
99.3 Cash Sources and Uses Table
99.4 Cash Balance Forecast through August 12, 2011
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