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Date Announced: 04 Nov 2011
No buyer found for the French manufacturer of solar panels, and spin-off option is said to be unviable.
Cambridge, Ontario (November 4, 2011): ATS Automation Tooling Systems Inc. (TSX: ATA) (“ATS” or the “Company”) today announced that, as required under French Law, its Photowatt International S.A.S subsidiary in Bourgoin-Jallieu, France (“PWF”) has initiated an information/consultation process with its employee works council regarding the filing of an application with French Courts for the opening of bankruptcy proceedings with a view to asking for the protection of the bankruptcy Courts. PWF expects to pursue a “recovery” proceeding (“redressement judiciaire”) under the supervision of a court appointed trustee. The objective of such a recovery process is to explore opportunities for PWF’s operations in an effort to preserve jobs and maximize value.
For over a year ATS has considered a broad range of options for the separation of its solar business from its automation business, including a process involving a spinoff of the Company’s combined solar businesses or a sale of PWF and/or Photowatt Ontario (“PWO”).
The sale process for PWF recently concluded without producing an acceptable transaction. The deterioration of economic conditions and the solar market in Europe (and in particular increased Asian competition and lower demand for solar products in France), have severely impacted PWF. The Company re-examined the spinoff alternative and has concluded it is not viable. Other options in relation to PWF have been exhausted and given the aforementioned conditions, taking steps towards a bankruptcy filing has become necessary.
“Having explored all separation avenues, ATS will support PWF and its employees through a potential recovery process,” said Anthony Caputo, ATS Chief Executive Officer. “We plan to separate the PWO solar assets within the next six months. Looking forward, in terms of creating value, we have a solid core business, we are growing organically and through acquisition and are positioned to continue to execute our strategy.”
In order to support PWF and its employees, ATS intends to offer funding for three months during a recovery period. ATS notes that the French bankruptcy process is different from the North American process, and requires a more collaborative approach. ATS has identified a number of matters that will be given due consideration throughout the course of the process, and which could give rise to additional expenditures. TheCompany is engaged with experienced external advisors, who have significant subject matter expertise, to assist with this process.
ATS remains committed to the separation of its entire solar business from its core automation business. To complete this goal, ATS is advancing opportunities related to the other solar assets. These opportunities are expected to positively impact cash during the next six months. Specifically,
• ATS is initiating a formal sale process for Photowatt Ontario.
• ATS has received a non-binding letter of intent for the purchase of an ATS- owned building in France that formerly housed PWF module assembly.
Management expects that, if completed, the proceeds from these opportunities will offset the go-forward losses and cash outflows that will result from the bankruptcy process. Since April 1, 2011 the solar business of ATS has been reported as Discontinued Operations.
For the second quarter of fiscal 2012, ATS expects to record impairment charges and write-offs totalling $64 million related to PWF operations, including the previously announced $24 million of charges related to the termination of certain silicon and wafer supply agreements and other charges related to inventories, silicon deposits, and other PWF assets. This charge does not include the go-forward losses and cash outflows referred to above.
In fiscal 2011, ATS’s continuing Automation Systems Group (“ASG”) operations recorded revenues of $485.3 million and net income from continuing operations of $27.9 million. Revenues and net income in the first quarter of fiscal 2012 were $126.9 million and $6.2 million, respectively, and Order Backlog entering the second quarter of fiscal 2012 was $328 million.
Source: ATS/Photowatt
E-mail: via web site
Web Site: www.atsautomation.com
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