Solyndra Cancels IPO, Opts to Raise $175M from Existing Investors
Another one bites the dust.
Solyndra canceled its planned initial public offering this morning ?due to adverse market conditions,? the company explained?in a filing with the U.S. Securities and Exchange Commission. ?Fremont, Calif.-based Solyndra will instead sell $175 million in convertible promissory notes to existing investors.
Solyndra chief executive Chris Gronet said that the funding will allow the company to meet its growth targets. He added:
Given the ongoing uncertainties in the public capital markets, we elected to pursue alternative funding from our existing investor base
The move by Solyndra, which hoped to raise $300 million through the IPO, follows Xinjiang Goldwind?s decision earlier this week not to go public in Hong Kong. Other companies that have gone public recently, such as biofuel firm Codexis and Chinese solar company Jinko Solar, have gotten lukewarm responses.
Solyndra makes easy-to-install, thin-film solar panels for rooftops.
The company got a $535 million loan from the Energy Department last September to build a manufacturing facility. An audit of the company?s finances found that it was burning through the mountains of cash that it has raised. Its manufacturing costs are also quite high.
No problem, Gronet says. The company Fab 2 manufacturing plant should be online in late 2010 and annual production should be 300 megawatts by the fourth quarter of 2011, which will reduce manufacturing costs.
Still, the pullback raises questions about when the company will be able to stand on its own.
There is also a political dimension to the story: The White House wants and needs Solyndra to succeed so it can say that its stimulus investments were worthwhile and can create self-sustaining businesses.
Energy Department money man Matt Rogers said as much when he blogged in May that “the new factory could create as many as 1,000 long-term jobs in operations and supply.”
White House photo: Lawrence Jackson