Timminco files for bankruptcy protection
A worker cleans solar panels at the 63-acre solar panel installation operated by Azure Power in Khadoda, India. The slump in demand for solar power panels has hit the revenue of Canadian silicon producer Timminco Ltd. (KUNI TAKAHASHI/NYT)
Silicon metal producer Timminco Limited is filing for bankruptcy protection from creditors while it restructures under the federal Companies' Creditors Arrangement Act
Timminco said Tuesday it made the move because the company's financial position had deteriorated and it is finding it increasingly difficult to raise money.
Timminco shares were halted
The TSX later said the company's stock has been immediately suspended from trading and the exchange is reviewing Timminco to see if it should be delisted from Canada's largest stock market.
Timminco and other companies in the solar technology industry are under pressure as cash-strapped governments scale back subsidies to the industry, Chinese competition intensifies and the low cost of natural gas makes gas-fired power less expensive by comparison.
Another Canadian company, ATS Automation Tooling Systems Inc. recently booked a quarterly loss of $67.1-million as the company took a big charge for its money-losing solar technology unit.
ATS's loss included $76.4-million in red ink from its Photowatt's solar technology business, which ATS is winding down after failing to find a buyer for the unit.
In Timminco's release announcing the bankruptcy filing, the company said it faces reduced cash flow from silicon metal operations and weaker solar markets that have delayed a restart of commercial production at the company's unit that makes equipment for the solar power industry.
In addition, Timminco is facing more difficulty in getting financing under existing credit lines and through new sources of capital.
The Toronto company said it obtained an order from the Ontario Superior Court for protection from creditors until Feb. 2 while it tries to restructure its operations.
“The company will remain in possession and control of their current and future assets, undertaking and properties, and the proceeds thereof,” Timminco said in a release.
“The company's operations will continue uninterrupted during the CCAA proceeding and obligations to employees and suppliers of goods and services provided after the filing date will continue to be met thereafter.”
Timminco said its Quebec Silicon LP, a venture that makes silicon metal for Bécancour Silicon and Dow Corning, is not part of the bankruptcy filing.
Under the CCAA process, FTI Consulting Canada Inc. has been appointed as the court-appointed monitor of the company's business.
Timminco produces silicon metal for the chemical silicones, aluminum and electronics solar industries, through its majority-owned joint venture with Dow Corning, known as Quebec Silicon.
Timminco is also a producer of solar-grade silicon for the solar photovoltaic energy industry, through its subsidiary Becancour Silicon.
In its third quarter, Timminco reported a consolidated loss of $2.4-million, well below the $34-million loss in the same quarter a year ago.
Quarterly sales fell to $28.6-million from $36.9-million in the third quarter of 2010.
The company replaced its former chief executive officer last year and has made other streamlining moves to reverse its fortunes.
Published on Tuesday, Jan. 03, 2012 1:52PM EST