Despite the lack of an official announcement by the Sharp Corporation, it's been reported by Bloomberg that the Osaka-based electronics company is seeking to sell Recurrent Energy LLC, a solar project development company it acquired in 2010. As part of a larger restructuring plan, Sharp is predicted to sell full stake in the San Francisco-based company, which it bought for $305 million, for the U.S. equivalent of $321 million (25 billion yen).
According to two unnamed sources, additional restructuring efforts on the part of Sharp will also include a significant amount of loans backed by the company’s two primary banks, Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. The “revival package” is earmarked at somewhere in the neighborhood of 360 billion yen. The Kyodo News agency in Japan is also reporting that restructuring efforts are likely to result in the loss of nearly 11,000 jobs by early 2014.
Arno Harris, CEO of Recurrent Energy, provided a written statement emphasizing that the impending sale by Sharp should be seen as no reflection on the profitability of his company or the state of the solar industry as a whole.
“With almost 700 MW of contracted projects and a 2.5 GW project pipeline, Recurrent Energy’s business is strong, profitable and growing,” Harris said. “We continue to meet and exceed our business goals as we build out our contracted project portfolio. To date we have secured almost $2 billion in project finance commitments from third parties and have ample capital to execute on all existing projects.”
Addressing the wider issue of the viability of the solar industry — and a move by Sharp that some may view as a desire to divest itself of its interest in solar panel and solar cell production, which it’s been mass producing since 1963 — Harris added, “The manufacturing side of the solar industry is experiencing some growing pains, but cost reductions continue to drive a robust market for leading developers like Recurrent Energy. Realignment is a natural part of industry maturity, which will ultimately unlock tremendous value, stimulate a new era of growth and make solar a pillar of mainstream energy markets.”
According to the company’s LinkedIn profile, Recurrent Energy currently has between 51 and 200 employees and is hiring for several positions. Although there has been no official word yet on how the sale of the company may impact those employees, Harris’s words seem to indicate that the separation from Sharp will only be felt as a minor hiccup on continued operations.
“Recurrent Energy has excellent and long-standing relationships with the major financial institutions engaged in the energy sector,” Harris said, “and we have every confidence, based on our industry-leading position in North America and our strong profitability, that Recurrent Energy will retain the interest of financial sponsors, whether Sharp, a new sponsor, or a combination of the two.”
Requests for additional comments from Mr. Harris were not immediately returned at the time of this publication.
UPDATE: Sharp plans to halt its solar cell and module production and sales in the U.S. and Europe by March, and plans to either sell or consolidate its solar product manufacturing plants in Japan, according to Bloomberg.
Lead image: For sale sign via Shutterstock
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