REPORT OF R. TODD NEILSONChief Restructuring Officer
March 21, 2012
2049 Century Park East, Suite 2525Los Angeles, CA 90067310.499.4750brg-expert.com
i
TABLE OF CONTENTS
I. INTRODUCTION .................................................................................................................................... 1
II. SCOPE OF ANALYSIS .......................................................................................................................... 2
III. SUMMARY OF CONCLUSIONS ........................................................................................................ 3
IV. REPORT SUMMARY .......................................................................................................................... 4
A.
General Overview .............................................................................................................. 4
B.
Solyndra’s Product and Technology .................................................................................. 6
C.
Financing and Construction of Solyndra Manufacturing Facilities ................................... 8
D.
The Impact of the Sudden Downturn in the Solar Market and the GlobalFinancial Crisis ................................................................................................................ 10
E.
The DOE Loan Guarantee and Construction of Fab 2 ..................................................... 13
F.
Solyndra’s Financial Performance ................................................................................... 18
G.
Solyndra’s Restructuring and Capital Raising Efforts in 2010 ........................................ 20
H.
Events Leading to and Summary of February 2011 Restructuring .................................. 28
1.
Tranche A Debt ................................................................................................... 29
I.
Events Leading to Bankruptcy Filing .............................................................................. 32
V. SOLAR TECHNOLOGY AND PRODUCTS ...................................................................................... 36
A.
History ............................................................................................................................. 36
B.
Design .............................................................................................................................. 36
C.
Comparative Advantage .................................................................................................. 38
D.
New Products ................................................................................................................... 40
VI. EXTERNAL ENVIRONMENT AND MARKET CONDITIONS ..................................................... 41
A.
Impact of the Recession of 2008 ...................................................................................... 42
B.
Incentive Programs .......................................................................................................... 44
1.
Germany ............................................................................................................. 46
2.
Spain ................................................................................................................... 46
3.
Italy ..................................................................................................................... 47
C.
Competition ..................................................................................................................... 47
1.
Polysilicon (P-Si) Based Competitors ................................................................ 48
a.
Polysilicon (P-Si) Supply....................................................................... 49
2.
China Enters Market ........................................................................................... 50
D.
Private Investment in the Solar Industry .......................................................................... 53
VII. CORPORATE STRUCTURE ............................................................................................................ 54
iiVIII. FAB 1 MANUFACTURING FACILITY ......................................................................................... 56
IX. CUSTOMER AGREEMENTS ............................................................................................................ 59
A.
Overview of Customer Agreements ................................................................................. 59
B.
Key Terms........................................................................................................................ 60
C.
Customer Agreements ...................................................................................................... 61
1.
Phoenix Solar AG ............................................................................................... 61
2.
Solar Power, Inc. ................................................................................................. 62
3.
GeckoLogic GmbH ............................................................................................. 64
4.
Carlisle Syntec, Incorporated .............................................................................. 65
5.
SunConnex B.V. ................................................................................................. 66
6.
EBITSCHenergietechnik GmbH ........................................................................ 67
7.
USE Umwelt Sonne Energie GmbH ................................................................... 68
8.
Alwitra, GmbH ................................................................................................... 69
9.
SunSystem, S.p.A. .............................................................................................. 70
X. $535 MILLION DOE LOAN GUARANTEE ...................................................................................... 72
A.
Brief History of the DOE Loan Guarantee Program........................................................ 73
1.
Title XVII of the Energy Policy Act of 2005 ..................................................... 74
2.
2006 Advanced Energy Initiative ....................................................................... 75
3.
The American Recovery and Reinvestment Act of 2009 ................................... 75
4.
Department of Energy Loan Guarantee Office ................................................... 76
B.
DOE Loan Guarantee Process ......................................................................................... 79
1.
Application Submission ...................................................................................... 79
2.
Initial Due Diligence and Term Sheet Negotiation ............................................. 80
3.
Credit Analysis and Review ............................................................................... 80
4.
Deal Approval ..................................................................................................... 80
5.
Final Due Diligence and Negotiation of Financing Documents ......................... 81
6.
Closing ................................................................................................................ 81
C.
The “$535 Million” DOE Loan Guarantee ...................................................................... 81
1.
DOE Loan Guarantee Solicitation ...................................................................... 82
2.
Solyndra’s Pre-Application ................................................................................. 82
3.
Invitation to Submit Full Application ................................................................. 83
4.
Submission of Full Application .......................................................................... 84
a.
Summary of Full Application ................................................................ 85
5.
Revisions to Full Application ............................................................................. 86
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