AstroPower files for bankruptcy - General Electric bids $15 million for solar-power company

source: Steven Church Delaware online 2004.02.03

AstroPower Inc. has filed for bankruptcy as part of an offer by General Electric Co. to buy most of the company's assets for $15 million.[what a steal!]

The solar-power pioneer filed for Chapter 11 bankruptcy protection late Sunday, listing debts at $143.5 million and assets at $205 million. The court action sets up a bidding process that will result in a new owner by the end of April. Although GE already has made an offer, any company or individual can submit a bid. If no one exceeds GE's offer, AstroPower's assets will go to that company. The bidding will be overseen by the bankruptcy court in Wilmington.

Chief executive Carl H. Young III said a sale of most of the company's U.S. assets should allow AstroPower to continue operating. "We're getting so close to good things," he said Monday.

The bankruptcy filing and pending sale follows a year of bad news, as the Glasgow-based company fell from its place as one of the most admired technology companies in Delaware. After it failed to file several financial reports required by the federal government last year, AstroPower saw its stock price fall to less than $1 from a high of more than $40 a share in 2000. The company also lost about half its work force through layoffs and attrition. It now employs about 350 people in Delaware.

AstroPower's new owner would decide whether to continue building solar-electric panels, the company's main products, in Delaware, or move production out of state.

GE spokesman Dennis Murphy declined to say what GE's plans would be for AstroPower, but he said GE believes the company would be a good addition. GE has been looking to invest in solar power as part of its strategy to compete in the renewable energy market. GE bought Enron Corp.'s wind-energy division after that company declared bankruptcy.

Officials with Gov. Ruth Ann Minner's administration have met with GE and two other companies that have expressed interest in buying AstroPower, said Judy McKinney-Cherry, director of the Delaware Economic Development Office. The companies did not make any promises, but they gave the impression they would keep manufacturing operations in Delaware, she said.

Whichever company winds up buying AstroPower, the state will put together a package of incentives aimed at keeping those jobs in Delaware, McKinney-Cherry said. She declined to say how much money the state might be prepared to offer.

AstroPower founder Allen Barnett said a GE takeover would be good news for the employees at AstroPower's main plant in Glasgow. AstroPower has too many valuable assets, from its new production equipment to its skilled workers, for GE to start up production someplace else, said Barnett, who left the company last year but remains one of its biggest shareholders.

GE does not currently have any solar-power production capability, Murphy said.

Stock analyst Eric Prouty said GE's interest is an important vote of confidence in AstroPower and the rest of the solar-power industry. "Those guys are pretty serious about renewable-energy technologies," said Prouty of Adams, Harkness & Hill Inc. in Boston.

GE Energy, the GE subsidiary that has bid on AstroPower, bills itself as one of the world's leading suppliers of power-generation technology, with 2003 revenues of nearly $18.5 billion. And Enron's wind-energy division has been steadily bringing in strong revenue for the company, Prouty said.

Other companies are likely to enter the bidding for AstroPower, Prouty said, even though the company has failed to release any financial data to investors for more than a year.

Employees are more likely than stockholders to benefit from the transaction, Prouty said. The company, in its statement, said that if the sale goes through as proposed, "it is unlikely that there will be any return to the company's shareholders."

AstroPower disclosed its financial problems last year, after company officers failed to file financial reports required by the U.S. Securities and Exchange Commission. The company was delisted from the Nasdaq Stock Market in late May, and its stock price tumbled. On Monday, it lost more than 90 percent of its value to close at 10 cents a share.

In September, the board of directors hired an investment banking firm from Philadelphia to help it either sell the company or find a new group of investors. Since then the company has been talking to potential suitors, Young said.

In October, AstroPower moved out of its executive office building and turned it over to its landlord.