2012-08-23 "Solyndra plant may sell at huge loss" by David R. Baker from "San Francisco Chronicle"[http://www.sfgate.com/business/article/Solyndra-plant-may-sell-at-huge-loss-3811513.php]:
Solyndra's factory in Fremont, which closed nearly a year ago as the solar company spiraled into bankruptcy, may sell for just a fraction of what taxpayers invested in it.
But then, that's not unusual in bankruptcy.
Seagate Technology, a Cupertino company that makes computer hard drives, has reached a tentative agreement to buy Solyndra's factory and headquarters for $90.3 million, unless someone else swoops in with a better offer. Any sale will require the approval of a bankruptcy court judge.
Solyndra built the facility on Kato Road with $528 million in federal stimulus loans - the first such loans handed out by the Obama administration. In a March 2010 filing with the U.S. Securities and Exchange Commission, before the factory was finished, Solyndra estimated the total cost would hit $738 million. That estimate included land, construction, equipment and startup costs.
Most of the equipment has since been auctioned off. While $90.3 million may seem small compared with the amount spent on the building, hard assets sold during bankruptcy proceedings typically bring investors just pennies on the dollar.
"The point is, you sell something for what you can get at a given time and a given place," said Frederick Lambert, a UC Hastings College of Law professor who focuses on corporate and securities law. "This is real cash, right now, and when you're in a distressed situation where it's basically a fire sale, it's a question of what offer's there, and what's not there."
Seagate could still back out of the sale. The company will perform a diligence review over the next 45 days before deciding whether to proceed, said company spokesman Brian Ziel.
The company has not yet said what it plans to do with the 411,618-square-foot facility.
Property fits Seagate -
But at first glance, the property seems a good fit for Seagate.
Built from scratch and completed in late 2010, the facility boasts a state-of-the-art clean room, systems for collecting and storing chemical wastes and electrical service capable of supplying 22 megawatts to any machinery inside. Two backup diesel generators on the site can provide 2 megawatts of electricity each. And Solyndra's own tube-shaped solar panels still cover the roof, generating as much as 1.2 megawatts.
(A megawatt is a snapshot figure, roughly equal to the amount of electricity used by 750 typical homes at any given instant.)
After filing for bankruptcy in September, Solyndra tried for months to find someone to buy the facility and its machinery as a complete package. Financial advisers Imperial Capital contacted more than 150 potential buyers, spread out over 12 countries, without success.
Solyndra then brought in real estate firm Jones Lang LaSalle to market the building without its equipment. Jones Lang even translated the sales material into Mandarin, in hopes of finding a buyer in China.
The company received "dozens of expressions of interest," according to a document Solyndra filed Wednesday with the federal bankruptcy court in Delaware, where the case is being heard. Potential buyers included solar companies, other technology manufacturers and data-center operators.
"After due consultation with Solyndra and its advisors, Solyndra determined that the bid submitted by Seagate Technology, LLC ... constituted the highest and best bid submitted," the court filing read.
Good for Fremont -
Should the deal go through, it will come as welcome news to Fremont.
The city was hit hard by the closure of the West Coast's last large car manufacturing plant in April of 2010. Solyndra's bankruptcy didn't help. But the former New United Motor Manufacturing Inc. plant is now making electric cars for Tesla Motors, which bought the facility for $42 million. And now, Solyndra's former plant may have new occupants as well.
"We think this validates the fact that Fremont is attractive to these types of technology companies," said Christina Briggs, economic development manager for the city. "Advanced manufacturing is one of Fremont's important strengths, and this is a classic example."
Seagate Technology in Cupertino has reached a tentative deal to buy Solyndra's factory and headquarters for $90.3 million. Photo: Paul Sakuma, Associated Press / SF
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