Bankrupt solar-panel maker Solyndra will pay back a portion of what it owes the U.S. Department of Energy for its $535 million loan guarantee according to the company’s proposed Chapter 11 reorganization plan, filed late Friday with the U.S. Bankruptcy Court in Wilmington, Del. But not much.
The loan guarantee, which Solyndra first applied for in 2006 (See, “Solyndra CRO finds no evidence of wrongdoing in report on DOE loan,” LCD News, March 28, 2012), is split into two tranches for the purposes of the plan. The first, tranche B, consists of $142.8 million in claims, which the company’s disclosure statement says will receive a recovery of 0-17%. The second, tranche D, consists of $385 million in claims and will recover “0% plus, depending on [the] outcome of liquidation efforts.”
The controversial $75 million loan provided by Argonaut Ventures and Madrone Partners, which stepped in line for repayment ahead of the DOE loan during Solyndra’s February 2011 restructuring, will recover 50-100% under the plan. (See, “Politics of solar energy mean uncertainty for Solyndra, others,” LCD News, Sept. 19, 2011). Argonaut and Madrone are serving as sponsors of Solyndra’s bankruptcy plan, providing the company with an exit facility and a settlement fund loan, in exchange for which the creditors’ committee will release any claims and rights of action it has against the prepetition lenders.
The plan incorporates multiple settlements between Solyndra, its creditors’ committee, lenders, creditors, and the WARN plaintiffs pursuing class-action suits against company, according to the disclosure statement. Among other things, Argonaut and Madrone will fund a WARN settlement loan of $3.5 million, although the company says claims asserted by the plaintiffs could exceed $15 million.
About $27 million in general unsecured claims of Solyndra Holdings will recover about 3% on their claims, while $50-120 million in unsecured claims of Solyndra itself will only recover 2.5-6%, according to the plan.
The disclosure statement also suggests that Solyndra Chief Restructuring Officer R. Todd Neilson, in his role as residual trustee once the plan goes into effect, could seek damages for anti-competitive conduct against other solar-panel manufacturers. Fremont, Calif.-based Solyndra filed for Chapter 11 protection last Sept. 6, blaming its failure, in part, on competition from solar-panel manufacturers subsidized by the Chinese government.
Under a recovery analysis conducted by Imperial Capital and filed with the disclosure statement, the net estimated proceeds available for distribution through the plan is about $65 million under the low estimate, and about $125 million under the high estimate. The range remains an estimate because Solyndra is still in the process of liquidating its real estate and intellectual property. Solyndra hired Jones Lang LaSalle Brokerage as its real-estate broker in February, and while Solyndra expects to pull in less than $2 million for its IP, according to the estimate, it anticipates the company’s buildings and land will make up the lion’s share of available funds.
A hearing on the disclosure statement is scheduled for Sept. 7. – John Bringardner
CIT Group this afternoon completed a two-part senior notes offering via joint bookrunners Bank of America, Deutsche Bank, Goldman Sachs, and J.P. Morgan, along with lead manager Credit Agricole, sources said. Terms on the BB-/B1 tranches were inked at the tight end of guidance and target size, totaling $3 billion. Both carry a typical T+50 make-whole call and change-of-control put at 101, according to a filing. This marks the financial-services firm’s fourth bond transaction this year. As with previous deals, proceeds will be used to fund general corporate purposes and to refinance existing notes, particularly the 7% series C notes due 2016 and 2017, according to an SEC filing. CIT has been actively addressing these maturities, most recently with the announced redemption of $600 million of 2016 notes at par on Aug. 20. Terms:
