By Yuliya Chernova
Solar-energy technology company BrightSource Energy Inc. had a
year to raise money in a new equity round and repay its lenders,
but it has delayed repayment several times as it shifts its
business focus, VentureWire has learned.
The Oakland, Calif.-based company, now 10 years old and backed
by more than $615 million in equity funding, has supplied the
technology and is part-owner of the world's largest solar thermal
power plant, Ivanpah Solar Electric Generating System, which is
located in the Mojave Desert and whose other owners are NRG Energy
Inc. (NRG) and Google Inc. (GOOG) The project is funded in part by
$1.6 billion in federal loans.
Between July and October of last year, BrightSource brought in
$35 million in a credit facility from existing investors, according
to Securities and Exchange Commission documents filed by one of
BrightSource's investors, BDCA Venture Inc. (BDCV), formerly called
Keating Capital.
The credit facility obligated the company to either raise at
least $30 million in new equity financing or pay the creditors
principal and accrued interest by July 10, 2014, a BDCA Venture
document said. Upon a closing of a new equity round, the note
holders would be able to convert their notes into preferred shares,
the deal stipulated.
On July 10, the note holders amended the agreement to extend the
maturity date to Aug. 10, according to the document.
That deadline passed. The debt now matures on Feb. 15, 2015,
according to the most recent filing made by BDCA.
"The company has continued to work with its shareholders and
third parties in adjusting its capital structure to meet its
financing needs," said Joe Desmond, BrightSource's senior vice
president of marketing and government affairs, in a statement to
VentureWire. Mr. Desmond declined to comment further on
BrightSource's financing situation.
The shifting repayment schedule comes amid an overall shift away
from major solar-power development projects by the company.
BrightSource at first envisioned being a major developer of
solar-power plants in the U.S., and filed documents to go public in
October 2011 with that in mind. It said at the time it had
contracts to sell electricity in the U.S. that "represent one of
the largest utility-scale solar pipelines in the United States and
should provide us with a significant revenue opportunity between
2012 and 2016."
But the market for solar thermal technology in the U.S., and
BrightSource's plans along with it, changed. In April 2012, it
pulled its initial public offering application and began shifting
its business plan. Ivanpah is the only full-scale power plant using
BrightSource's technology that is operational today out of that
pipeline.
The company has taken "much more of a global focus on
[concentrated solar power] technology," Mr. Desmond said.
"Secondly, there's a transition to much more of a technology
provider, as opposed to doing project development."
This shift has taken two years and has affected BrightSource's
timeline for additional fundraising, one investor in the company
said.
Delays also have hit the company's major project. Ivanpah has
pushed off the repayment on its federal loans from several months
to a year, as VentureWire reported previously.
BrightSource has raised more than $615 million in equity since
being founded in 2004, from investors including VantagePoint
Capital Partners as well as Alstom Group, BP Ventures, California
State Teachers' Retirement System, Chevron Technology Ventures, DBL
Investors, Draper Fisher Jurvetson, Google.org and Morgan Stanley
(MS).
Some of BrightSource's shareholders have written down their
investments in the company. As of June 30, BDCA Venture wrote down
its $3.1 million investment by 48%, saying its value was $1.6
million, according to SEC documents. At the end of September, BDCA
wrote down its holding even further, saying it was worth less than
$1.5 million.
Alstom took a 23 million euro ($28.6 million) impairment on its
EUR106 million investment in BrightSource, as of March 31, it said
in its annual financial report. The report said it counted the fair
value of its investment in BrightSource at EUR83 million. Alstom
has a 21% ownership of BrightSource on a fully diluted basis,
according to the report.
Alstom is now divesting its holdings in BrightSource as part of
Alstom's sale of some of its assets to General Electric Co.
(GE)
"BrightSource is part of the Energy businesses and, as such,
included in the transaction with GE," an Alstom spokeswoman wrote
in an email to VentureWire.
Even as BrightSource sorts through its financing options, the
company has made progress with its new business plan.
Earlier this month BrightSource sold its interest for an
undisclosed sum in Palen Solar Energy Generating Station, a
California power plant it has been developing, as it increasingly
looks for opportunities abroad.
The company has made progress internationally. This week it
announced a joint venture with Shanghai Electric Group Co.
(600021.SH, 2727.HK), to build large solar thermal power plants in
China. In July, one of BrightSource's projects in Israel, in which
it is part-owner, received project financing from the European
Investment Bank and Bank Hapoalim (POLI.TV).
Write to Yuliya Chernova at yuliya.chernova@wsj.com
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