McGuinty Failure -Waterloo Ontario – Arise Solar Bankruptcy Filing – 30 days and counting
By Chuck Howitt, Record staff
- Thu Jan 5 2012
Arise hopes to save solar systems division
The Waterloo-based solar technology company filed a notice of intention with the federal bankruptcy office on Dec. 18, giving it 30 days of protection against creditors while it draws up a proposal to repay some of its debts.
Since then the company has remained silent on the matter until this week when it issued a news release, dated Dec. 16.
It says the company’s board of directors determined that the protective filing was necessary because Arise “was in financial difficulty and was no longer able to meet its obligations generally as they come due.”
Immediately after the notice was filed, the company’s entire board resigned, along with chief executive officer Dan Shea and chief financial officer Doug McCollam, the release said.
During the period it is protected from creditors, Arise is funding ongoing operations using the third installment of a $1.5-million bridge loan it arranged previously with Radiant Offshore Fund Ltd., a Toronto-based hedge fund, the release noted.
In the meantime, Arise is being run by a chief restructuring officer, Jack Pinder, a B.C.-based consultant appointed by PricewaterhouseCoopers, the trustee chosen by the bankruptcy office.
The company is also being advised by Sunlogics Power Fund, a B.C. solar technology company that has invested in Arise, the release said.
The protective filing is the latest blow for the once-thriving solar technology company launched in 1996.
Founder Ian McLellan resigned from the company in September. One month later, Arise shut down its three-year old solar-cell manufacturing plant in Germany after it was unable to upgrade its technology to produce the kind of higher-efficiency cells required to survive in a fiercely competitive market.
In December, the heavily indebted company’s shares were delisted on the Toronto Stock Exchange.
In an interview, Pinder said his goal is to rescue the still-profitable systems side of the company, which has engineers and installs ground and rooftop-mounted solar systems.
It has installed systems on the Region of Waterloo operations centre on Maplegrove Road in Cambridge, the City of Kitchener operations centre on Goodrich Drive and the University of Waterloo faculty of environment building.
“We’ve got contracts that have to be finished and there’s others being bid on,” he said.
He was unsure what will happen to Arise’s silicon division, which planned to manufacture high-purity silicon for making solar cells at a plant on Washburn Drive in Kitchener.
The company, which was forced to lay off nearly all its staff in December, is bringing back about a dozen engineers to keep the systems division going during the protection period, Pinder said.
Last year, about 40 people worked out of Arise’s headquarters at 65 Northland Rd., but the cash-strapped company cut that number to about 23 earlier in the fall, he said.
Pinder said he and the trustee have been talking with creditors and hope to have a restructuring proposal ready by the end of this week or next week.
Cash-flow problems finally tipped the company over the edge, he said. “The one side of the business (systems) was OK, and they kept putting money into R&D and they just weren’t watching the total cash flow.”
Arise has liabilities of $9.6 million owed to a long list of creditors, according to documents filed with the Ontario Superior Court of Justice.
Only two of the creditors are secured. Radiant Offshore Fund is owed $3.7 million and Haverstock Masterfund $356,562.
Arise can apply to have the stay period extended for up to six months. If its proposal is not approved by creditors it will be forced into bankruptcy.
Pinder said the news release dated Dec. 16 was not released until this week because it was being “kicked around by lawyers” and not everyone was available because of the Christmas holidays.
It was sent immediately to the Toronto Stock Exchange, but the exchange didn’t feel compelled to release it to the public, he said.
“We still wanted to issue it (the release) so people would know what was going on.”
via TheRecord – Arise hopes to save solar systems division.