AE Polysilicon shutdown and pending asset sale

Will the Advanced Fluidized Bed Reactor technology be sold?


I began looking into AE Polysilicon after a Blog comment by someone also claiming to be named Edgar said:

Did the Plant close? I heard they laid everyone off??

I first noticed “Motech pulls the plug on AE Polysilicon operations” by Mark Osborne for this evening since I had been traveling back from New Jersey after the Memorial Day holiday. On Tuesday, May 29, 2012, Motech Industries, Inc. (TWO:6244) announced:

Due to a drastically changing solar industry environment and a lack of economies of scale, AE Polysilicon Corporation (“AEP”), an investee company of the Company, had decided to cease polysilicon production, despite numerous efforts to improve the price competitiveness of its products. To protect the rights and interests of AEP’s creditors and shareholders, the board of directors of AEP had adopted a resolution to undertake measures, including initiating workforce reductions, proceeding with a safe-shutdown of its manufacturing facilities, and conducting an asset sale. The asset sale proposal is pending approval by the stockholders of AEP. The Company is making this announcement as these latest developments at AEP may have a material impact on the stockholders’ rights and interests of the Company.

ae-polysilicon-1 Motech said they invested about $26 Million in AE Polysilicon plus a prepayment of $15 Million or $41 Million total as of April 30, 2012. Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) has held a 20% stake in Motech since December 2009.

Scheuten Solar was another Series B investor in AEP. However, Scheuten Solar declared insolvency earlier this year although some of the assets were sold to Sunway Technology Investment Co. Ltd., and the business was restarted.

TOTAL S.A. (NYSE:TOT) subsidiary Total Gas & Power USA (SAS) acquired a 25.4% interest in AE Polysilicon through a Series C round back in 2010 and listed the stake as 30% in the TOTAL Form 20-F 2011. I have not found a disclosure stating the size of the TOTAL investment.

AE Polysilicon has not replied to my questions or requests since the AE Polysilicon Groundbreaking – Part 2 and Part 3 photos. Motech has not responded to my inquiries about AE Polysilicon since early May. After a week, TOTAL said:

Please note that Total owns a minority interest in AE Polysilicon. As this group is not a consolidated subsidiary, we suggest that you contact them directly for additional details.

According to “Government Subsidies Do No Good For Some Renewable Energy Cos.” by Yuliya Chernova for the WSJ Blog Venture Capital Dispatch, AE Polysilicon was never able to use the 48C Manufacturing Tax Credit I posted about in AE Polysilicon scores $44.85 Million US Manufacturing Tax Credit because “start-up manufacturers with limited or no income cannot use such tax breaks.” With “Factory Brings Solar Energy Jobs to Former Steel Town”, the US Department of Energy (DOE) touted the same Manufacturing Tax Credit.

I have fond memories of how the In Search of AE Polysilicon post established my signature Blog series.

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