Emcore Considers Selling Assets
The Albuquerque fiber-optic component and solar-cell maker was in breach of its Bank of America loan covenants in the quarter ended March 31.
The bank has agreed to reset those covenants for later this year – albeit at the penalty of a higher interest rate and a reduction in the amount of credit available.
Emcore has cut its costs massively over the past few months, slashing the workforce headcount by 30% since September 2008. CEO Hong Hou and predecessor Reuben Richards have taken a 15% salary cut. But even these drastic measures have not been enough to halt a slide in cash assets.
“We continue to pursue and evaluate a number of capital-raising alternatives including debt or equity financing, jointventure opportunities and the potential sale of certain assets," Hou told investors. “We expect to finalize a definitive agreement within this quarter."
One bright spot amid the financial gloom is Emcore’s satellite solar business. During the latest quarter, it agreed a $70 million supply deal that will begin shipment in the current quarter. Emcore also said that it is in negotiations on a further $50 million deal.
Since then the company has announced a contract through to 2014 with Space Systems Loral, and that it will supply approximately $5 million of solar panels for NASA’s Global Precipitation Measurement spacecraft.
While the firm’s terrestrial solar business is performing less well, Hou says that Emcore is ahead of competitors on the development of inverted metamorphic (IMM) cells, which were invented at the US National Renewable Energy Laboratory (NREL).
He believes that IMM cell efficiencies of up to 43% will be achieved before the end of this year, ultimately increasing to 45% under high concentration. NREL won a US Department of Energy prize for the transfer of this technology to Emcore in May.