Energy Conversion Devices (NASDAQ: ENER) shares plummeted on Tuesday after the company filed for Chapter 11 bankruptcy protection.
The Michigan-based company has been suffering in the solar survival-of-the-fittest brought on by falling prices and subsidy cutbacks, particularly in Europe.
And it just couldn’t hold on any longer. After laying off 500 employees in November, the company continued to struggle.
Energy Conversion officials have announced plans to sell off assets, including United Solar Ovonic, which makes thin-film solar cells, and its stake in Ovonyx.
The company hopes to complete these sales within 90 days.
It already sold Ovonic Battery Co. for $58 million in cash before other fees to BASF Corp.
CEO Julian Hawkins said in a statement:
“We firmly believe there is a strong and sustainable commercial market for Uni-Solar products. However our current capital structure and legacy costs are preventing USO from making the investments necessary for the future of the business without restructuring though the bankruptcy process.”
The company plans to maintain Quarton Partners, its investment banking firm, to take care of the asset sales.
Energy Conversion had been tanking for years, finally taking the hardest hit from the solar industry struggle. Officials hope this restructuring will help to set the company back on its feet.
But it has announced that shareholders and creditors will likely not be paid even after it pulls itself back up.
In fact, common stock will disappear. This announcement led to an 80% plunge on Tuesday. And shares have continued to fall, down 9.83% this afternoon to $0.26.
That’s all for now,