Tuesday September 16, 9:13 am ET
Analyst says JA Solar, Evergreen may need to write down millions due to Lehman bankruptcy
NEW YORK (AP) -- A pair of solar power companies that relied on Lehman Brothers Holdings Inc. as part of their public offerings may need to write down millions due to the investment bank's recent bankruptcy filing, an analyst said Tuesday.
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JA Solar Holdings Co. completed an offering of $400 million of convertible notes due 2013, with Lehman acting as one underwriter in May.
As part of the offering, JA Solar entered into a 6.5 million share lending agreement with Lehman's Europe unit. The company said that it is currently investigating the bankruptcy and is currently "unaware of the intentions of Lehman Europe."
"Until such further information is available, the company will continue to consider the shares not outstanding for the purpose of computing and reporting per-share results," JA Solar said in a statement.
Separately, Evergreen Solar Inc. finished an offering of $373.8 million in notes due 2012 in July with Lehman as the lead underwriter.
Lazard Capital Markets analyst Sanjay Shrestha said if the existing capped call transaction -- part of the notes offering -- is not honored by Lehman's successor, Evergreen will have to write off $39.5 million and JA Solar $19.5 million.
But while "the broader alternative energy sector could remain highly volatile in the near term, dictated by the current market, we believe the risk/reward is attractive for medium-term investor," Shrestha said in a note to clients.
Shrestha rates JA Solar as "Buy" with a $32 price target and Evergreen as "Buy" with a $15 price target. |
