Evergreen cutting and running to China

Evergreen cutting and running to China

Evergreen Solar Inc., the former darling of the Bay State’s nascent green-energy economy, said Tuesday it will shutter its manufacturing facility in Devens by the end of March. The company said 800 workers will be affected.

The Marlborough, Mass.-based developer of solar-energy components and related technologies said the move is part of its previously announced transition to China. Evergreen already makes solar wafers at its plant in Wuhan, China, and previously said it will eventually shift its solar-panel assembly work from Devens to China.

On Tuesday, the company reiterated that the move was prompted by strong competition from foreign panel makers as well as the relatively lower cost of manufacturing its products in China.

Nonetheless, the announcement could trigger some financial blow back for the company. In 2007, the state committed $58 million in financing to advance the development of Evergreen’s Devens plant. The agreement required the company to create 350 jobs and keep them for five years, or until 2012. Failure to meet those covenants will trigger a clawback provision, requiring Evergreen to refund some of the funding.

Such a scenario could prove problematic for the company, which has struggled to stay listed on the Nasdaq Stock Exchange while also recovering from financial missteps at home and abroad.

The agreement also requires Evergreen (Nasdaq: ESLRD) to keep 310 existing jobs for seven years, or until 2014. The company had employed 925 Massachusetts workers as of mid-2010.

In connection with the Devens closure, Evergreen said it expects to incur non-cash charges of approximately $340 million in capital write-offs. Roughly $150 million of intangible and cash-related prepayments associated with its silicon contracts also are under review. The company said additional non-cash charges may result from that analysis.

Evergreen also expects to incur about $15 million of costs from employee severance and other closure-related costs.

Read more: Evergreen cutting and running to China | Boston Business Journal

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