Investors hunt failed alternative energy assets
An alternative energy company that failed despite a $39 million government loan has asked a Delaware bankruptcy judge to approve the sale of its assets to a private equity firm for about $30 million.
Rockland Capital is offering to buy Beacon Power Corp.'s assets, including a 20-megawatt flywheel energy storage plant in New York, for $5.5 million in cash and a promissory note of $25 million payable to the Department of Energy.
The Energy Department also is slated to receive a cash payment of about $3.7 million, which a spokesman said would represent a recovery for federal taxpayers of about 70 percent of their investment.
"The department is pleased that this agreement improves the prospect of recovering taxpayer funds," DOE spokesman Damien LaVera said Tuesday before a court hearing to approve the deal.
Beacon, based in Tyngsboro, Mass., makes flywheel energy storage systems that keep power frequency steady on electrical grids. It blamed its bankruptcy filing on the political fallout involving Solyndra Inc., a California solar energy company that sought bankruptcy protection after receiving a loan of more than $500 million from the federal government.
Beacon drew down $39.1 million from a $43 million DOE loan offer to a Beacon subsdiary for construction of the 200-flywheel facility in Stephentown, N.Y., outside Albany.
The company was awarded a $24 million Smart Grid stimulus grant in 2009 to build a similar facility in Hazle Township, Pa., with Pennsylvania kicking in an additional grant of $5 million.
Beacon also received a $4.6 million loan from Massachusetts in 2008 for expansion of its Tyngsboro facility. Under the proposed purchase agreement, the Massachusetts Development Finance Agency, which has a secured claim of about $3.3 million on the balance of its loan, is to receive $750,000.