Beacon Power, Backed by Obama Administration Provided US Loan Guarantees, Just Like Solyndra, Files Bankruptcy

Beacon Power, Backed by Obama Administration Provided US Loan Guarantees, Just Like Solyndra, Files Bankruptcy

From Eye on the World: 

Oct. 31 (Bloomberg) -- Beacon Power Corp., an energy- storage company that received $43 million in backing from the U.S. program that supported failed solar-panel maker Solyndra LLC, filed for bankruptcy after struggling to raise private financing.

The money-losing company, which makes flywheels that manage energy moving through a power grid, had sought to avoid the fate of Solyndra, which entered bankruptcy last month after receiving a $535 million loan guarantee from a U.S. Energy Department program designed to spur alternative energy development. Beacon faced delisting of its shares by the Nasdaq Stock Market and warned in an Aug. 9 regulatory filing that it might not remain a “going concern.”

“The current economic and political climate, the financing terms mandated by DOE, and Beacon’s recent delisting notice from Nasdaq have together severely restricted Beacon’s access to additional investments through the equity markets,” Chief Executive Officer F. William Capp said in papers filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.

Beacon, based in Tyngsboro, Massachusetts, listed assets of $72 million and debt of $47 million in its Chapter 11 petition. Two affiliates also entered court protection.

Beacon’s first grid-scale plant, with 200 flywheels, began operating in January. The 20-megawatt facility in Stephentown, New York, was funded using the $43 million Energy Department loan guarantee issued in August 2010. About $39.1 million is currently due under the loan, Capp said.

Pennsylvania Grants

In addition, Beacon received $29 million in grants from the U.S. and Pennsylvania for a 20-megawatt plant in that state and hired Group Robinson LLC to help raise more funds for the $53 million project. Group Robinson, a Menlo Park, California- based renewable-energy consulting company, also was helping Beacon find customers outside the U.S.

But hey, that good thing is,

Beacon’s U.S. loan agreement includes “many protections for the taxpayer,” said Damien LaVera, an Energy Department spokesman.

“This plant itself, which is operational and generating revenue, is a valuable collateral asset,” LaVera said in an e-mail yesterday. The Beacon Power subsidiary that received the loan guarantee “has cash reserves and proceeds from the plant that it was required to hold as collateral on the loan.”

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