Solyndra postpones plant auction, DOE leader testifies on loan guarantee

Solyndra did not receive any acceptable bids by a Nov. 16 deadline, and postponed an auction for its manufacturing plant in California until January.

Reuters reports that Solyndra said it hopes to find a turnkey buyer who can restart production and rehire some of the laid off workers. The company filed for bankruptcy in August after receiving a $535 million loan guarantee from the U.S. Department of Energy in 2009.

Solyndra initially set to auction its assets November 18, but that is now scheduled for January 19. The auction will happen if acceptable turnkey bids are received by January 17, the article said. If no acceptable bids come forward, Solynda reportedly plans to seek court approval to auction off assets during the last week of January.

Energy Secretary Steven Chu testified before the House of Representatives’ Energy and Commerce committee November 17. In a prepared statement, Chu said that the loan guarantee was not rushed, nor was it based on political considerations as some have speculated.

“My decision to guarantee a loan to Solyndra was based on the analysis of experienced professionals and on the strength of the information they had available to them at the time,” Chu said in the statement.

Solyndra faced a liquidity crisis in 2010 because of a drop in the demand of solar photovoltaic panels due to the global recession, and informed the DOE that it needed emergency financing from existing investors to complete a scale-up of operations and be profitable, Chu said.

“The Department faced a difficult decision: Force the company into immediate bankruptcy or restructure the loan guarantee to allow the company to accept emergency financing that would be paid back first if the company was still unable to recover,” Chu said. “Immediate bankruptcy meant a 100 percent certainty of default, with an unfinished plant as collateral. Restructuring improved the chance of recovering taxpayers money by giving the company a fighting chance at success, with a completed plant as collateral.”

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