Day4 Energy (TSX:DFE), Canada’s leading maker of photovoltaic solar cells, appears to be in critical condition.
The Vancouver company’s shares were reduced to nearly nothing Monday, dropping to an all-time low of $0.02, on the news that it faces delisting on the TSX. Its market cap has shrunk to a meagre $1.37 million and it is $126.4 million in debt.
Day4 has been struggling under deepening debt since 2009 and has had to resort to layoffs and selling off assets – but that hasn’t stopped the hemorrhaging.
Last year, PwC, the company’s auditors, expressed “significant doubt about the company’s ability to continue.”
One year ago, Day4 CEO George Rubin told Business in Vancouver that the PV industry as a whole – not just his company – was facing hard times and expected 2011 to be another hard year. (See “Short-term prospects dim for solar energy” – issue 1122; April 26-May 2, 2011.)
“As long as you manage yourself carefully in the next 12 months, frankly the future is a lot better than what it was 12 months ago,” Rubin said at the time.
But despite predictions the industry was on the rebound, companies such as Day4 continue to struggle under an oversupply of cheaper products, mostly from China, and the cancellation of renewable energy subsidies in Europe, Day4’s primary market.
In 2010, Day4 was struggling under an $84 million debt and was forced to lay off 30 employees, which reduced the company’s staff from 200 to 170. Its debt deepened to $126.4 million by the end of December 2011, prompting the company’s auditors to reiterate its doubt the company can continue as a going concern.
According to its recent annual financial statements, Day4 has stopped manufacturing its own modules and is now selling a third-party product.
A spokesperson for the company could not be reached for comment by press time.
