Photowatt France Engages Works Council Regarding Bankruptcy Proceedings
November 01 2011 - 12:48AM
PR Newswire (Canada)
CAMBRIDGE, ON, Nov. 4, 2011 /CNW/ - ATS Automation Tooling Systems
Inc. ("ATS" or the "Company") today announced that, as required
under French Law, its Photowatt International S.A.S subsidiary in
Bourgoin-Jallieu, France ("PWF") has initiated an
information/consultation process with its employee works council
regarding the filing of an application with French Courts for the
opening of bankruptcy proceedings with a view to asking for the
protection of the bankruptcy Courts. PWF expects to pursue a
"recovery" proceeding ("redressement judiciaire") under the
supervision of a court appointed trustee. The objective of such a
recovery process is to explore opportunities for PWF's operations
in an effort to preserve jobs and maximize value. For over a year
ATS has considered a broad range of options for the separation of
its solar business from its automation business, including a
process involving a spinoff of the Company's combined solar
businesses or a sale of PWF and/or Photowatt Ontario ("PWO").
The sale process for PWF recently concluded without producing an
acceptable transaction. The deterioration of economic
conditions and the solar market in Europe (and in particular
increased Asian competition and lower demand for solar products in
France), have severely impacted PWF. The Company re-examined the
spinoff alternative and has concluded it is not viable. Other
options in relation to PWF have been exhausted and given the
aforementioned conditions, taking steps towards a bankruptcy filing
has become necessary. "Having explored all separation avenues, ATS
will support PWF and its employees through a potential recovery
process," said Anthony Caputo, ATS Chief Executive Officer.
"We plan to separate the PWO solar assets within the next six
months. Looking forward, in terms of creating value, we have
a solid core business, we are growing organically and through
acquisition and are positioned to continue to execute our
strategy." In order to support PWF and its employees, ATS intends
to offer funding for three months during a recovery period.
ATS notes that the French bankruptcy process is different from the
North American process, and requires a more collaborative
approach. ATS has identified a number of matters that will be
given due consideration throughout the course of the process, and
which could give rise to additional expenditures. The Company
is engaged with experienced external advisors, who have significant
subject matter expertise, to assist with this process. ATS remains
committed to the separation of its entire solar business from its
core automation business. To complete this goal, ATS is
advancing opportunities related to the other solar assets.
These opportunities are expected to positively impact cash during
the next six months. Specifically, -- ATS is initiating a
formal sale process for Photowatt Ontario. -- ATS has received a
non-binding letter of intent for the purchase of an ATS- owned
building in France that formerly housed PWF module assembly.
Management expects that, if completed, the proceeds from these
opportunities will offset the go-forward losses and cash outflows
that will result from the bankruptcy process. Since April 1,
2011 the solar business of ATS has been reported as Discontinued
Operations. For the second quarter of fiscal 2012, ATS
expects to record impairment charges and write-offs totalling $64
million related to PWF operations, including the previously
announced $24 million of charges related to the termination of
certain silicon and wafer supply agreements and other charges
related to inventories, silicon deposits, and other PWF
assets. This charge does not include the go-forward losses
and cash outflows referred to above. In fiscal 2011, ATS's
continuing Automation Systems Group ("ASG") operations recorded
revenues of $485.3 million and net income from continuing
operations of $27.9 million. Revenues and net income in the first
quarter of fiscal 2012 were $126.9 million and $6.2 million,
respectively, and Order Backlog entering the second quarter of
fiscal 2012 was $328 million. About ATS ATS Automation provides
innovative, custom designed, built and installed manufacturing
solutions to many of the world's most successful companies. Founded
in 1978, ATS uses its industry-leading knowledge and global
capabilities to serve the sophisticated automation systems' needs
of multinational customers in industries such as life sciences,
computer/electronics, energy, transportation and consumer products.
It also leverages its many years of experience and skills to
fulfill the specialized automation product manufacturing
requirements of customers. Through Photowatt, ATS participates in
the solar energy industry. ATS employs approximately 2,900 people
at 21 manufacturing facilities in Canada, the United States,
Europe, Southeast Asia and China. The Company's shares are traded
on the Toronto Stock Exchange under the symbol ATA. Visit the
Company's website at www.atsautomation.com. Note to Readers:
Forward-Looking Statements This press release contains certain
statements that constitute forward-looking information within the
meaning of applicable securities laws ("forward-looking
statements"). Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of ATS, or developments
in ATS's business or in its industry, to differ materially from the
anticipated results, performance, achievements or developments
expressed or implied by such forward-looking statements.
Forward-looking statements include all disclosure regarding
possible events, conditions or results of operations that is based
on assumptions about future economic conditions and courses of
action. Forward-looking statements may also include, without
limitation, any statement relating to future events, conditions or
circumstances. ATS cautions you not to place undue reliance upon
any such forward-looking statements, which speak only as of the
date they are made. Forward-looking statements relate to, among
other things, Photowatt France initiating an
information/consultation process with its employee works council
regarding the filing of an application with French Courts for the
opening of bankruptcy proceedings with a view to asking for the
protection of the bankruptcy Courts; PWF expecting to pursue
recovery proceedings; the objective of a recovery process; ATS's
support of PWF and its employees through a potential recovery
process; separation of PWO and timing thereof; ATS positioned to
continue to execute its strategy; ATS's intention to offer funding
to PWF for three months during a recovery period; potential for
additional expenditures to be incurred by ATS throughout the PWF
bankruptcy process; expected positive impact of opportunities
related to other solar assets; sale process for PWO; potential sale
of the ATS-owned building in France; management expectation that,
if completed, the proceeds from sale of other solar assets will
offset the go-forward losses and cash outflows that will result
from the bankruptcy process; and expectation to record impairment
charges and the amount thereof. The risks and uncertainties
that may affect forward-looking statements include, among
others, general market performance including capital market
conditions and availability of credit; impact of the global
economy; performance of the market sectors that ATS serves;
conditions in the solar market and the extent of market demand for
solar products; the level of solar module and system orders
obtained by Photowatt France; that advice from the employee works
council is delayed; that, in response to the application, the
French bankruptcy court declines to open, or there is a delay in
the opening of, bankruptcy proceedings, that the French bankruptcy
court elects a proceeding other than recovery; that a recovery
process fails to achieve the desired results with respect to
preservation of jobs and maximization of value due to lack of
interested parties or otherwise; that a sale process for PWO fails
to generate an acceptable transaction due to market, regulatory, or
other factors; unexpected delays and issues, on the timing, form
and structure of the contemplated separation; the availability and
possible reduction or elimination of government subsidies and
incentives for solar products in various jurisdictions, including
France and Ontario; the financial attractiveness of, and demand
for, the solar projects being developed by PWO; the success of
developers with whom PWO has signed agreements in obtaining FIT
contracts and ultimately developing the projects; ability to obtain
necessary government and other certifications and approvals for
solar projects in a timely fashion; that one or both of the
customer agreements signed by PWO is terminated or impaired as a
result of a cancellation or material change in the FIT program in
Ontario, and, as a result contemplated minimum amounts to be
supplied are not supplied with resulting impacts on revenue and
profitability; supplier, customer, employee, government and media
reaction to bankruptcy proceedings; labour disruptions;that
expenditures associated with the bankruptcy exceed current
estimates or proceeds from sale of other assets are less than
currently expected; that the current LOI for the sale of the
building in France does not result in a definitive agreement; risks
relating to legal proceedings to which ATS is or may become a
party; and other risks detailed from time to time in ATS's filings
with Canadian provincial securities regulators. Forward-looking
statements are based on management's current plans, estimates,
projections, beliefs and opinions, and ATS does not undertake any
obligation to update forward-looking statements should assumptions
related to these plans, estimates, projections, beliefs and
opinions change. ATS Automation Tooling Systems Inc. CONTACT: Maria
Perrella, Chief Financial OfficerCarl Galloway, Vice-President,
Treasurer519 653-6500
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