The Zacks Analyst Blog Highlights: Evergreen Solar, First Solar, Energy Conversion Devices, Transocean and Statoil ASA

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Aug 17, 2011, 09:30 ET

CHICAGO, Aug. 17, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Evergreen Solar Inc. (Nasdaq: ESLR), First Solar Inc. (Nasdaq: FSLR) Energy Conversion Devices Inc. (Nasdaq: ENER) Transocean Ltd. (NYSE: RIG) and Statoil ASA (NYSE: STO).

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Here are highlights from Tuesday's Analyst Blog:

Evergreen Solar Files Chapter 11

Evergreen Solar Inc. (Nasdaq: ESLR) announced that it had voluntarily filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code. The company has been on a slippery slope over the past two years.

Evergreen Solar faced with a market flooded with cheap Asian competition, continued to register losses. The company tried to stem the tide by relocating its manufacturing base from its high cost Massachusetts factory to Wuhan, China.

The USP for Evergreen Solar has always been its proprietary crystalline silicon technology known as String Ribbon, which uses approximately half the silicon for manufacturing wafers, compared to peers using the conventional sawing method. However, with the steep decline in silicon prices, the advantage gradually lost its shine. Lastly, the pain became worse for the company in recent times as key markets like Germany and Italy were gradually winding down their subsidy programs.

Evergreen Solar filed the petition in the U.S. Bankruptcy Court for the District of Delaware. In conjunction with the Chapter 11 filing, Evergreen Solar stated that it entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of its 13% Convertible Senior Secured Notes.

Under the restructuring, an entity formed by the note holders, ES Purchaser LLC, entered into an asset purchase agreement with Evergreen Solar. ES Purchaser will bid for the assets being sold under the Bankruptcy Code. If better offers for the assets are not obtained, ES Purchaser is expected to acquire most of the company's assets pursuant to the asset purchase agreement.

As part of Evergreen Solar's reorganization activities, the company will reduce its U.S. and European workforce by about 65 people, including suspension of operations at its Midland, Michigan filament facility.

However, it's Wuhan, China manufacturing facility is expected to continue depending on market demand. At the same time the company will engage in discussions with its investors in China regarding the fate of the facility and its sources of financing.

Evergreen Solar engages in the development, manufacturing and marketing of solar power products worldwide, including solar cells, panels and photovoltaic systems.

These modules are designed for a range of solar electric power applications, including water pumping, communications, outdoor lighting, rural electrification, recreational vehicles and stand-alone applications. The company sells its products through distributors, system integrators, and other value-added resellers. Its products are sold primarily in the U.S. and Europe.

Evergreen Solar currently has a short term Zacks #3 Rank (Hold) in line with peers like First Solar Inc. (Nasdaq: FSLR) and Energy Conversion Devices Inc. (Nasdaq: ENER). Over the longer run, we maintain our Underperform recommendation on Evergreen Solar shares.

Transocean to Buy Aker

Offshore-oil driller Transocean Ltd. (NYSE: RIG) announced plans for an all-cash acquisition of Norway's Aker Drilling ASA for 7.93 billion kroner or $1.46 billion along with a net debt of $800 million. The purchase price – of 26.50 kroner per share – represents a 62% premium to Aker Drilling's 30-day average price of 16.39 kroner per share.

This deal marks the biggest acquisition on part of Transocean in the last four years and will be executed through its wholly owned subsidiary Transocean Services AS. The purchase will lend approximately $1.05 billion to Transocean's contract backlog and is expected to be immediately accretive to its earnings.

The to-be acquired company, Aker Drilling, owns and operates two harsh-environment, ultra-deepwater semi-submersible rigs – Aker Barents and Aker Spitsbergen – contracted to Statoil ASA (NYSE: STO) and Det Norske in Norway. Aker Drilling also has two ultra-deepwater drillships under construction in South Korea that are slated for delivery in 2013.

Management of Switzerland-based Transocean remains highly optimistic about this deal and believes that the acquisition will render the company's fleet a commanding position in offshore drilling.

We believe that following the purchase, Transocean will possess a technologically advanced fleet of drilling rigs that will be capable of operating in tough of Arctic and Brazilian waters.

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