For Solyndra, looks like going public isn’t such a good plan after all. The solar company says tonight it has opted to raise $175 million by selling convertible promissory notes to existing investors instead of doing an IPO. Last December, the company filed to go public on the Nasdaq and was aiming to raise as much as $300 million
The Fremont-based company, which makes panels with tubes lined with copper-indium-gallium-selenide cells, cites “going uncertainties in the public capital markets” for pulling the IPO:
“Given the ongoing uncertainties in the public capital markets, we elected to pursue alternative funding from our existing investor base. This funding allows us to address strong customer demand by maintaining our aggressive growth plans,” says Solyndra CEO Chris Gronet in a statement.
Solyndra joins a few other greentech companies that have withdrawn its IPO plans in recent months. Nobao Renewable Energy, a Shanghai company that builds geothermal energy systems to heat and cool buildings, gutted its march to the New York Stock Exchange earlier this month. Trony Solar, a maker of amorphous-silicon solar panels in Shenzhen, postponed its IPO dream last December. Meanwhile, Jinko Solar, a crystalline silicon solar panel maker in Shanghai, went public on the New York Stock Exchange last month and got a lukewarm reception. The shares stared at $11 and closed at $11.01 on the first day.
Solyndra says it will get the money it needs in the short-term by selling $175 million’s worth of convertible notes. The company’s statement goes on to say that its second manufacturing complex, which is under construction, should start churning out panels in the fourth quarter of this year, and that would be two months ahead of schedule. By the fourth quarter of 2011, Gronet says his company should reach an annualized production of more than 300 megawatts, which is a scale big enough for the company to “substantially reduce” its manufacturing costs.
The company has shown a big appetite for investments to run its operations and carry out factory expansion plans. Last year, the company won a whopping $535 million loan guarantee from the U.S. Department of Energy, and that loan guarantee translated into a loan from the U.S. Treasury. Solyndra also announced $198 million in equity financing the day it broke ground on the new factory last September. As of last October, the company had raised about $970 million in equity.
Meanwhile, Solyndra’s filings with the U.S. Securities and Exchange Commission have shown that its manufacturing costs are much higher than many its competitors, though the company’s own mounting system designs are supposed to lead to lower installation costs than others. Back in April this year, company’s own auditor warned that the panel maker’s operating losses and $532.3 million in deficit, among others, raised questions about its ability to continue its operation.