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First Solar Slides on Financing Delay, Downgrade: Chicago Mover

Feb. 10 (Bloomberg) -- First Solar Inc., the biggest maker of thin-film solar panels, fell the most in almost two months after permitting issues delayed a U.S. loan guarantee for a power plant in California and an analyst at Collins Stewart LLC downgraded the shares.

First Solar dropped 10 percent to $43.91 at the close in New York, the most since Dec. 14. The shares have declined 72 percent in the past year.

First Solar sold the 230-megawatt Antelope Valley Solar Ranch One plant to Exelon Corp. for $75 million in September. The Tempe, Arizona-based solar company will have to buy it back if the project cannot win final construction permits and qualify for a $646 million U.S. Energy Department loan guarantee, First Solar said yesterday in a regulatory filing.

“First Solar will not be able to recognize revenues from AVSR construction unless a sale is completed and funded,” Dan Ries, an analyst at Collins Stewart, said today in a note to clients. He reduced his rating to “neutral” from “buy.”

If required to repurchase Antelope Valley, First Solar will probably be able to sell it to another buyer and the transaction may reduce its first-quarter profit to break-even, Ries said.

When Exelon purchased the project, the deal was contingent upon First Solar receiving the government-backed funding “within approximately four months,” according to the filing. The companies have agreed to extend that deadline to Feb. 24.

To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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