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8-K - FORM 8-K - EVERGREEN SOLAR INC | b83698e8vk.htm |
Exhibit 99.1
PRESS RELEASE
Evergreen Solar Announces Recapitalization Plan
Marlboro, Massachusetts, December 6, 2010 Evergreen Solar, Inc. (NasdaqGM: ESLR), a
manufacturer of String Ribbon® solar power products with its proprietary, low-cost
silicon wafer technology, today announced that its Board of Directors has approved a comprehensive
recapitalization plan to align the companys capital structure with its current business model and
to better position Evergreen Solar for future growth. The recapitalization plan, if fully
executed, will:
| Substantially reduce the companys outstanding indebtedness and annual interest expense; | ||
| Exchange a substantial portion of the companys existing convertible debt for new debt with longer maturities and lower conversion prices; | ||
| Create a capital structure that should provide greater incentive to convertible debt holders to convert their notes into shares of the companys common stock, which would further accomplish Evergreen Solars goal of substantially reducing outstanding debt; and | ||
| Enhance the companys flexibility to manage its business by eliminating certain restrictive covenants and the security interests contained in existing debt instruments. |
The recapitalization plan is comprised of the following key elements:
| Exchange offers and a consent solicitation, as summarized below; | ||
| Raising additional capital by seeking to sell up to $40,000,000 aggregate principal amount of Evergreen Solars new 4% Convertible Subordinated Additional Cash Notes due 2020; | ||
| Implementing the 1-for-6 reverse stock split previously approved by Evergreen Solars stockholders at the companys annual meeting on July 27, 2010, which will become effective prior to the closing of the exchange offers; and | ||
| Increasing Evergreen Solars authorized shares of common stock from 120,000,000 to 240,000,000 shares (after giving effect to the reverse stock split), in order to ensure that the company has sufficient shares available for future issuances. |
Evergreen Solar plans to hold a Special Meeting of stockholders in early 2011 to ask its
stockholders to support the recapitalization plan. Specifically, the proposed exchange offers and
consent solicitation described in summary below, as well as the increase in authorized shares of
common stock, will require approval from the companys stockholders, in accordance with certain
NASDAQ and Delaware corporate law requirements. If the companys stockholders fail to provide the
approval required for NASDAQ and Delaware law purposes at the Special Meeting, the company will not
be able to implement its recapitalization plan as contemplated and thus will be unable to reduce
its outstanding indebtedness and interest expense or strengthen its capital structure and the
company will consider all other viable alternatives which may be available. Such alternatives may
not be on terms as favorable to its stockholders as the recapitalization plan. In addition, if at
the Special Meeting the companys stockholders
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fail to approve the proposed increase in the authorized shares of common stock, the company may
still choose to complete the exchange offers. Having these additional authorized shares would
increase the companys financial flexibility going forward to raise additional funding using equity
and equity linked securities. In addition, the lack of additional authorized shares could, under
certain circumstances, limit the companys ability to pay certain amounts under the new notes using
shares of common stock instead of cash, which would reduce the companys financial flexibility.
Lazard Capital Markets LLC will serve as the dealer manager for the exchange offers and sole
bookrunner for the new money offering.
Summary Description of Proposed Exchange Offers and Consent Solicitation
In the exchange offers, Evergreen Solar is offering to exchange (i) its new 4% Convertible
Subordinated Additional Cash Notes due 2020 for up to $200,000,000 aggregate principal amount of
its existing 4% Senior Convertible Notes and (ii) its new 7.5% Convertible Senior Notes due 2017
for all of its existing 13% Convertible Senior Secured Notes.
In exchange for each $1,000 principal amount of existing 4% notes that is tendered and accepted,
holders of existing 4% notes will receive new 4% notes. The amount of new 4% notes to be issued
will be determined by a modified Dutch auction, where holders must submit tenders in the range
from $425 principal amount to $500 principal amount of new 4% notes that would be issued for each
$1,000 principal amount of existing 4% notes surrendered for exchange by such holder. All existing
4% notes tendered up to $200,000,000 aggregate principal amount will receive new 4% notes at the
highest exchange ratio bid by holders in the tender. In the event more than $200,000,000 aggregate
principal amount of existing 4% notes are tendered, the company will accept all tenders at or below
such exchange ratio on a pro rata basis. The company will reject all existing 4% notes tendered in
excess of such exchange ratio.
In exchange for each $1,000 principal amount of existing 13% notes that is tendered and accepted,
holders of existing 13% notes will receive $1,000 principal amount of new 7.5% notes.
Both the new 4% notes and the new 7.5% notes contain terms and features that should provide greater
incentive to convertible note holders to convert their notes into shares of Evergreen Solars
common stock more quickly than the existing 4% notes and the existing 13% notes.
The purpose of the consent solicitation is to adopt proposed amendments to the indenture governing
the companys existing 13% notes, which will release the security interest and all of the
collateral securing the companys obligations under the existing 13% notes, terminate the existing
collateral documents and eliminate many of the restrictive covenants and certain events of default
in the indenture for the companys 13% notes.
Where You Can Find Additional Information
Further details regarding the terms and conditions of the exchange offers and consent solicitation,
including descriptions of the new notes and the material differences between the new notes and the
existing notes, can be found in the registration statement that has been filed with the SEC but has
not yet become effective, and in a tender offer statement on Schedule TO that will be filed with
the SEC. The securities subject to the registration statement may not be issued and sold prior to
the time the registration statement becomes effective. Any investor holding the companys existing
4% notes or 13% notes should read the registration statement, the tender offer statement and other
documents the company has filed or will file with the SEC for more complete information about the
issuer and the offering.
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In connection with the exchange offers and consent solicitation, Evergreen Solar has filed a
preliminary proxy statement with the SEC and expects to file and mail a definitive proxy statement
to stockholders as soon as practicable. Stockholders are advised to read the definitive proxy
statement because it will contain important information about the proposals to be presented and
voted upon.
The registration statement, preliminary proxy statement, the tender offer statement when filed and
other related documents can be obtained for free from the SECs Electronic Document Gathering and
Retrieval System (EDGAR), which may be accessed at www.sec.gov. Documents are also available for
free upon written or oral request made to the office of the Corporate Secretary, Evergreen Solar,
Inc., 138 Bartlett Street, Marlboro, Massachusetts 01752 (Telephone (508) 357-2221) and from the
Companys website at www.evergreensolar.com.
Non-Solicitation
This press release does not constitute an offer to purchase, a solicitation of an offer to
purchase, or a solicitation of an offer to sell securities. Evergreen Solar has not yet commenced
the exchange offers or the offering of its new 4% notes referred to above. The exchange offers will
not be made to, and the company will not accept tenders for exchange from, holders of its
outstanding 4% and 13% convertible notes in any jurisdiction in which the exchange offers or the
acceptance of such offers would not be in compliance with the securities or blue sky laws of that
jurisdiction.
The company and its directors, executive officers and other members of management and employees may
be deemed participants in the solicitation of proxies in connection with the Special Meeting.
Information concerning the interests of these persons, if any, in the matters to be voted upon is
set forth in the proxy statement.
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About Evergreen Solar, Inc.
Evergreen Solar, Inc. develops, manufactures and markets String Ribbon® solar power products
using its proprietary, low-cost silicon wafer technology. The companys patented wafer
manufacturing technology uses significantly less polysilicon than conventional processes. Evergreen
Solars products provide reliable and environmentally clean electric power for residential and
commercial applications globally. For more information about the company, please visit
www.evergreensolar.com. Evergreen Solar® and String Ribbon® are trademarks of Evergreen Solar, Inc.
Safe Harbor Statement
This press release includes statements regarding expectations, beliefs, strategies, goals,
outlook and other non-historical matters. Any such statements are forward-looking statements made
pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements include but are not limited to statements about the form and timing of
the exchange offers, the consent solicitation, the Special Meeting and the proposed sale of new 4%
notes. These forward-looking statements are neither promises nor guarantees and are subject to a
number of risks and uncertainties that could cause actual results to differ materially from the
companys current expectations. Factors that could cause or contribute to such differences
include, but are not limited to: the risk that the company does not commence or complete the
exchange offers, as a result of a change in capital and debt market conditions, changes in the
price of the companys common stock, unwillingness of the holders of existing notes to exchange
their existing notes for new notes having the terms proposed, delays due to the SEC review process
and the risk that the companys stockholders do not approve the proposals to be addressed at the
Special Meeting. Further discussions of these and other potential risk factors may be found in the
companys public filings with the SEC (www.sec.gov), including its Form 10-K for the fiscal year
ended December 31, 2009. Forward-looking statements speak only as of the date they are made. The
company undertakes no obligation to update any forward-looking statements.
CONTACT:
Evergreen Solar, Inc.
Michael McCarthy
Director of Investor & Government Affairs
mmccarthy@evergreensolar.com
Phone: 508-251-3261
Evergreen Solar, Inc.
Michael McCarthy
Director of Investor & Government Affairs
mmccarthy@evergreensolar.com
Phone: 508-251-3261