Alongside Satcon, its six subsidiaries Satcon Power Systems, Inc., Satcon Electronics, Inc., Satcon Power Systems (California), LLC, Satcon Power Systems Canada, Ltd, Satcon International, s.r.o. and Satcon Technology (Shenzhen) Co., Ltd have also filed for voluntary bankruptcy.
In order to allow it to continue operating, Satcon, whose core business is the production of photovoltaic inverters for large-scale commercial and utility projects, has also filed a number of first day motions with the court. It must wait for approval of the motions, however, before it can continue.
In a special meeting held yesterday, October 16 with Satcons board of directors, the decision to file for voluntary bankruptcy was unanimously approved. They also approved the decision to employ Lazard Middle Market LLC as financial advisor and investment banker, Epiq Bankruptcy Solutions LLC and law firm Fraser Milner Casgrain LLP, to help the company.
According to court documents filed, as of this June, Satcons assets totaled US$92.3 million. Meanwhile, its total debt was $121.9 million. Overall, it holds 18,026,016 shares of common stock.
Explaining the companys decision, president and CEO, Steve Rhoades, said, "This has been a difficult time for Satcon. After careful consideration of available alternatives, the Companys Board of Directors determined that the Chapter 11 filings were a necessary and prudent step, allowing the Company to continue to operate while giving us the opportunity to reorganize with a stronger balance sheet and capital structure. Our goal is for Satcon to emerge from bankruptcy reorganization and continue to provide our customers with the quality products that they need."
At the start of January, Satcon announced it would reduce its global workforce by 140, close its Canadian production plant and implement other cost reduction measures, in an attempt to break even by mid-2012.
At the time, the company said it expected to save about $15 million to $17 million per year, after the restructuring was implemented in Q2 2012. Rhodes added, "The compounding effects of reduced panel costs and market demand shifts toward North America and Asia have forced the entire industry to adjust, as we enter the next phase of development".