Tariff Decision Looms Large for Sale of SolarWorld

SolarWorld Americas Inc., one of two U.S. solar manufacturers asking President Donald Trump for tariffs on imported panels, says the move could revive a struggling industry. It may also boost the company’s value ahead of a potential sale.

The manufacturer, owned by bankrupt German panel maker SolarWorld AG, has already invited more than a dozen suitors to submit non-binding offers for the company. But final bids aren’t due until after Trump decides whether to levy tariffs, according to a spokesman for SolarWorld AG’s German insolvency administrator.

The push to find a buyer for SolarWorld Americas is the latest wrinkle in a months-long drive for tariffs that’s drawn opposition from most of the U.S. solar industry. SolarWorld and bankrupt Georgia panel maker Suniva Inc. say they desperately need protection from the flood of cheap imports from Asia. Critics argue tariffs would bail out two foreign-owned companies and their creditors at the expense of the U.S. solar industry, which has boomed thanks largely due to low-cost panels.

“Reviving manufacturing in the U.S. may be part of their plan, but this is probably just an effort to salvage money,” said Jenny Chase, a Zurich-based analyst at Bloomberg New Energy Finance.

The U.S. International Trade Commission recommended in October that Trump impose tariffs of as much as 35 percent on imported panels. The president has until Jan. 26 to decide. 

“Maybe we have a chance to recoup some of the company’s real value,” SolarWorld Americas Chief Executive Officer Juergen Stein said in an interview.

The effort to find a buyer for Hillsboro, Oregon-based SolarWorld Americas is being overseen by Horst Piepenburg, a court-appointed lawyer administering the German parent company’s insolvency proceedings. Macquarie Capital is leading the sales effort. More than 100 potential investors were initially approached, and 15 were invited to submit non-binding offers, Thomas Schulz, Piepenburg’s spokesman, said in an email. Bidders, however, asked that the deadline for final bids be pushed back until the scope and duration of any tariffs become clear.

“The first step: clarity from the Trump Administration,” Schulz said in a phone interview.

Waiting Game

Waiting for the White House to act can only help SolarWorld, Arash Roshan Zamir, Hamburg-based analyst at Warburg Research GmbH, said in a phone interview.

“If they wait a couple more days, they get a tariff of at least 30 percent. And if they’re lucky, maybe much more,” Zamir said. “Either way, the value of the company goes up.”

SolarWorld AG’s creditors include Centerbridge Partners LP, a New York-based investment firm, Schulz said. A spokesman for Centerbridge, which has about $14 billion in credit and distressed assets under management, declined to comment.

Jobs, Tariffs

Suniva filed the trade case in April, and SolarWorld Americas joined as a co-petitioner in May shortly after its parent declared insolvency. Rooftop installers and solar-farm developers that employ 85 percent of the industry’s 260,000 workers have largely opposed the push for tariffs. Higher panels prices, they warn, would cost thousands of jobs.

Suniva, which is majority owned by China-based Shunfeng International Clean Energy Ltd., has also been mulling buyout offers.

The 35 percent tariffs recommended by the trade commission are less than what SolarWorld and Suniva sought. Nonetheless, developers say duties will hurt.

“The trade laws that they’re actually using will cause more damage to American jobs than they’re claiming to protect,” said Matthew McGovern, chief executive officer of Santa Monica, California-based Cypress Creek Renewables LLC, a developer that was approached this year about buying SolarWorld Americas. “Under no other political dynamic or environment could this have worked.”

©2017 Bloomberg News

— With assistance by Luca Casiraghi, Karin Matussek, Sarah Syed, Laura J Keller, and Chris Martin

Lead image credit: CC0 Creative Commons | Pixabay

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