could evm be next ??

Sun sets on Solar Systems despite funding

September 08, 2009

Article from: The Australian

AUSTRALIA'S leading solar energy company was placed into the hands of voluntary administrators yesterday and almost all of its 150 staff stood down pending a review to see if the business can be salvaged.

PricewaterhouseCoopers partners Stephen Longley and David McEvoy were appointed voluntary administrators of Solar Systems Pty Ltd and two of its subsidiaries just two weeks after 20 per cent stakeholder, the Victorian power utility TRUenergy, wrote down its entire $53 million investment.

Solar Systems had received promises of $129m in funding from federal and state governments to build Australia's first large scale solar power station, a $420m project near Mildura in Victoria.

It also had ambitions for 1000MW of large-scale solar installations in Asia, using its unique solar dish technology, at an estimated cost of more than $3 billion, and to become one of the top five global solar energy companies over the next five years.

However, despite mandating Morgan Stanley to seek new funds and bring in new strategic or financial partners, it was unable to attract new finance and TRUenergy decided to cut its losses.

It is understood the decision to appoint administrators came after the late withdrawal of two international parties -- one private equity -- from talks about an equity injection of around $50m to $100m.

Mr Longley said he would assess the company's financial and operations position with a view to continuing operations on a reduced scale over the next three months to provide sufficient time to restructure and sell the business as a going concern.

He said staff would be advised of their future by the end of the week and a meeting of creditors would be held on September 17.

It is understood Solar Systems has around $56m of secured debt mostly held through some of its shareholders, including TRUenergy, the British financier and founder of Australian Wildlife Conservancy, Martin Copley, and Graeme Morgan, the founder and former owner of financial planning group Sealcorp.

Solar Systems' annual report shows that Morgan was the largest shareholder with 30.3million shares, while Copley held 5.5 million.

Options given to executives had an exercise price of more than $3 a share. Both are directors of the company.

The annual accounts show the company had revenue of just $2.9m, but losses of $21.3m in 2007-08, taking its accumulated losses to $74m.

The recently completed manufacturing facility in Abbotsford, Victoria, which had the capacity to build 500MW of solar PV installations a year, is now on care and maintenance.

Development of the Mildura power station, which was not due to begin construction for another 12 months, will also be put on hold.

It is not clear whether any new owner would qualify for the state and federal funding that had been previously committed.

http://www.theaustralian.news.com.au/business/story/0,28124,26040367-643,00.html