Global Solar Forsakes Private Equity Round, By Yuliya
Chernova
private equity
10/16/2008 – Thin-film solar module developer Global Solar
Energy Inc. cancelled its planned private equity round because of the broader
financial crisis, said Mike Gering, the company's chief executive.
"We
met with over 50 backers, but all of a sudden people stopped returning phone
calls," said Gering at a panel discussion in San Diego, Calif., organized by the
German American Business Association and Berlin Partner GmbH, which helps
companies relocate to Berlin or partner with local companies.
The
Tucson, Ariz.-based company continues growing, but at a slower rate. In November
it plans a ribbon-cutting opening of its new facility in Berlin, the CEO said.
"Our shareholders decided they'll continue sponsoring our growth. But
big growth has been delayed," said Gering.
The company is majority owned
by Germany-based I-Sol Ventures GmbH and its minority investor, with about a 19%
stake, Berlin-based Solon AG. It's one of a few developers of copper indium
gallium diSelenide cells that is actually in large-scale production. In a March
interview with Clean Technology Insight Gering said that the company was
considering raising financing of between $100 million and $150 million to
support the build-out of a 100-megawatt plant.
It's very difficult to
raise private equity financings for solar companies today, according to David
Chen, head of the clean-technology investment banking division at Morgan
Stanley, who spoke in an interview with Clean Technology Insight. Conditions for
deals have changed tremendously since July, a time when the bank completed a
large transaction in the solar space for a private company at a high valuation,
he said.
Solon, meanwhile, sees an increased opportunity for large
corporations to swoop in on start-ups that are struggling to get private equity,
according to Lars Podlowski, chief technical officer at Solon, who spoke at the
same German American Business Association luncheon.
"For us it is also
more difficult to finance these initiatives, because we always need cash to
finance our own growth," Podlowski said.
Overall "growth of the whole
industry might get slower" because of the difficult financial situation, he
said.
Gering noted that Global Solar will probably continue growing
organically for at least another year. "We'll prepare for a public offering" but
not go for it for a while, he said.
Gering noted that the company's cost
of doing business is "considerably cheaper than that of competition." He
declined to provide a cost per watt but said that "we are not far from First
Solar." First Solar is a leading developer of thin-film modules whose latest
reported manufacturing cost was $1.12 per watt.
Global Solar is also
talking to various customers, not limiting itself to Solon. Gl
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