The thin film solar firm that’s raised close to a billion dollars is raising still more. On Monday Solyndra announced that it has closed $75 million in a credit facility from existing investors. The company says it will use the funds for its capital requirements (read manufacturing ramp up) and help it reduce its manufacturing costs.
As we wrote earlier this month, this is a make or break year for Solyndra. The company hopes to boost its annual production rate of its tube-shaped solar panels to 200 MW by the end of this year and 300 MW by the end of 2013. That’s going to take significant funds, and Solyndra has already raised about $970 million in private equity, and also snagged a $535 million loan guarantee — the DOE’s flagship — to build its solar fab 2 plant.
Solyndra says this morning that along with the funding, the company has restructured its debt and its existing convertible notes have been exchanged for new notes, while the Department of Energy’s loan guarantee deal has been changed to extend the repayment period. Solyndra spokesperson David Miller told me that the terms of the changes in the loan guarantee are confidential but that “all existing debt holders adjusted their amortization schedules to accommodate the new financing.” Solyndra first raised $175 million in convertible promissory notes last year after it cancelled its IPO plans.
Republican lawmakers have recently made Solyndra a political target, and Republican leader in the House, Fred Upton (R-Mich.), has questioned the wisdom of giving Solyndra a loan guarantee that translated into the $535 loan from Treasury’s Federal Financing Bank. You can expect more on that theme now that the DOE loan guarantee has accommodated Solyndra with more time to pay off its loans.
Solyndra, founded in 2005, made a name for itself initially for its unusual solar panel design. The company came up with a design for a solar panel made up of a series of tubes lined with copper-indium-gallium-selenide solar cells. The idea is to capture reflected light from the rooftop, and the racking design is meant to cut equipment and labor costs. By mid 2009, the company had announced $2 billion of sales deals with customers that were mostly in Europe.
Production costs, however, are where the company started to hit a snag. Last November, Solyndra’s new CEO, Brian Harrison, announced a plan to close the first factory and lay off about 40 employees. The company also wasn’t going to renew contracts with about 135 temporary workers. Harrison said the plan would save the company about $60 million. Instead of reaching a total production capacity of 610 MW by 2013, as the company had originally envisioned, Solyndra was looking at up to 300 MW by the end of 2013.
Currently Solyndra says it has says its shipped 60 MW of modules to customers in 2010, and is approaching 100 MW installed by its customers.
The spotlight on Solyndra won’t go away any time soon. The company still has to prove it’s using money from investors and taxpayers wisely and can succeed long-term. It will have to meet the goals it has set for this year, and preferably exceed them, to be taken seriously.
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