Evergreen Solar's Transactions with Lehman Brothers
Monday September 15, 3:54 pm ET
MARLBORO, Mass.--(BUSINESS WIRE)--On July 2, 2008, Evergreen Solar, Inc. (NasdaqGM: ESLR - News), a manufacturer of String Ribbon™ solar power products with its proprietary, low-cost wafer technology, completed its public offering of $373.75 million aggregate principal amount of 4% Senior Convertible Notes due 2013 (the “Senior Notes”).
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Lehman Brothers Inc. (“Lehman”) was the lead underwriter for the sale of the Senior Notes. Net proceeds to the Company from the offering, including the cost of a capped call transaction, were approximately $325.8 million, all of which the Company received at the closing. None of these funds are on deposit with Lehman or any of its subsidiaries.
In connection with the Senior Notes offering, the Company entered into a capped call transaction with Lehman Brothers OTC Derivatives Inc., to reduce the ultimate dilution that would otherwise occur as a result of new common stock issuances upon conversion of the Senior Notes. The capped call transaction effectively increases the conversion price of the Senior Notes to $19.00 per share compared to the actual Senior Notes conversion price of $12.11 per share. To date, the Company has paid approximately $39.5 million for the capped call transaction. The Company is working with several investment banks to determine its best course of action to maintain the original intent of the capped call transaction.
Concurrent with the sale of the Senior Notes, the Company entered into a common stock lending agreement with Lehman Brothers International (Europe) (“Common Stock Borrower”) pursuant to which the Company loaned 30.9 million shares of its common stock to the Common Stock Borrower. The shares must be returned to the Company no later than July 15, 2013, the maturity date of the Senior Notes. Until that time, the shares are considered to be issued and outstanding for corporate law purposes. However, until the Company has more information regarding the bankruptcy proceedings involving Lehman Brothers Holdings Inc. and can properly assess whether the Common Stock Borrower will be able to fulfill its obligation to return the borrowed shares in 2013, the Company will continue to consider the shares not outstanding for the purpose of computing and reporting per share results.
“The agreements in question are with affiliates of Lehman Brothers Holdings Inc. that have not filed for bankruptcy protection and are structured to provide Evergreen Solar with as much legal protection as is customarily available in transactions such as these, said Michael El-Hillow, Chief Financial Officer. While the ultimate impact of the situation is expected to unfold over the next few months, we are availing ourselves of all legal remedies to protect our Company and its shareholders in this very fluid situation.
“The majority of our cash and short term investments are held by Silicon Valley Bank, our corporate commercial bank. We also have funds on deposit with two international commercial banks, continued El-Hillow. We have sufficient cash to complete our 160 MW Devens facility and support our other operating needs as we drive to profitability in 2009.”
About Evergreen Solar, Inc.
Evergreen Solar, Inc. develops, manufactures and markets String Ribbon™ solar power products using its proprietary, low-cost wafer technology. The company's patented wafer manufacturing technology uses significantly less polysilicon than conventional processes. Evergreen Solar's products provide reliable and environmentally clean electric power for residential and commercial applications globally. For more information about the company, please visit www.evergreensolar.com. Evergreen Solar® and String Ribbon™ are trademarks of Evergreen Solar, Inc.
Conference Call Information
Evergreen Solar’s management will conduct a conference call today at 5:00 p.m. (ET). The conference call will be webcast live over the Internet and can be accessed by logging on to the “Investors” section of Evergreen Solar’s website, www.evergreensolar.com, prior to the event. The call also can be accessed by dialing 800-562-8369 or 913-312-1267 (International) prior to the start of the call. Please reference confirmation code 4449799.
For those unable to join the live conference call, a replay will be available from 8:00 p.m. (ET) on September 15, 2008 through 8:00 p.m. (ET) on September 22, 2008. The webcast also will be archived on the Company's website. |
