MEMC Gains on Sale of 98 Megawatts of Europe Solar Farms
MEMC Electronic Materials Inc. (WFR), the second-largest U.S. polysilicon maker, gained the most in more than three years after announcing the sale of four solar farms in Europe with a total capacity of 98 megawatts.
MEMC rose 22 percent to $2.64 at the close in New York, the most intraday since November 2008.
MEMC completed sales in the second quarter of 60 megawatts of solar capacity in Bulgaria and 38 megawatts in Italy, the St. Peters, Missouri-based company said in a statement today. Terms weren’t disclosed. The company’s SunEdison project development unit became its largest source of revenue in the fourth quarter.
“The company guided to this sale on its last conference call, so it’s good to see the company doing as it had planned,” Jesse Pichel, an analyst with Jefferies Group Inc. in New York, said in an interview. The sales will “alleviate some liquidity concerns.”
Not all of the funds from the sales will add to MEMC’s liquidity because it borrowed against one of the projects in Bulgaria. The company has “non-recourse term loans from multiple financial institutions which are secured by a 60.4 MW solar energy system in Bulgaria,” according to a May 9 filing.
“It looks like the company has debt outstanding against these projects that it has to repay now,” Pichel said. “It basically hands this cash right back to the banks, which doesn’t help in a cash crunch.”
Altai Capital Management LP, a New York-based investment company, said June 8 it had more than doubled its stake in MEMC to become its second-largest holder. Altai is seeking to add co- founder Steven V. Tesoriere to MEMC’s board, according to a June 18 filing.
Bill Michalek, an MEMC spokesman, had no immediate comment today.
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