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Solyndra’s Founding CEO to Step Down
Solyndra, the solar startup that ditched its IPO dreams last month, is now swapping out its CEO. This morning Solyndra announced that its founding CEO Chris Gronet will move into an executive position, as well as serve as Chairman of the Board of Directors. The solar maker has hired Brian Harrison, the former President and CEO of flash memory maker Numonyx, B.V, as its new President and CEO.
When Solyndra was incorporated back in May 2005 it was actually named Gronet Technologies, after Gronet. In January 2006 it was renamed Solyndra, according to its S-1.
I had heard rumors earlier this month that Solyndra was looking for a new CEO. When I asked Solyndra’s Director of Communications Dave Miller if Gronet had stepped down a few weeks ago, he said “I can tell you that there is no plan for Chris Gronet to leave the company.” I guess that’s technically true as he plans to remain on in an executive capacity.
But clearly there’s been some turmoil at the company in the wake of the company’s recent inability to IPO — it filed its S-1 in December of 2009 and was planning to raise up to $300 million. Instead in June Solyndra opted to raise $175 million by selling convertible promissory notes from existing investors and cited “going uncertainties in the public capital markets” as the reason for the shelved plans.
One reason for Solyndra’s optimism earlier this year was because it was the recipient of the Department of Energy’s first loan guarantee, a $535 million guarantee to help it build its factory in Fremont, California. The company has also raised an aggregate of approximately $970 million through equity financings as of December 2009 according to its previous S-1.
But in April Solyndra auditor PricewaterhouseCoopers said that Solyndra’s operating losses, negative cash flow, and $532.3 million deficit “raise substantial doubt about its ability to continue as a going concern,” reported Reuters.
Compared to many of the other thin film solar companies around, including other CIGS players (which stands for the four materials that make up the solar cell, copper, indium, gallium, selenium), Solyndra has one of the highest manufacturing and capital factory costs around, as I pointed out in this article in May. That means Solyndra is spending more money than some competitors to make its solar gear at this stage, which could lead to higher operating costs than competitors, and could make it difficult for Solyndra to compete.
Was the DOE’s loan guarantee a mistake? Well, the DOE probably didn’t initially set out to give its first loan guarantee to a company that pulled its IPO and replaced its founding CEO.