CBD Energy’s grand plan to use the Westinghouse brand to reinvent itself on the US Nasdaq stock exchange has come to nought after the Westinghouse Solar pulled the pin on the deal over the weekend.
The California-based company, a spin-off from the famous Westinghouse appliance business a decade ago, had agreed in February last year to Sydney-based CBD Energy buying an 85 per cent stake in the company.
But in a SEC filing on Friday, US time, Westinghouse Solar said the merger was to have been consummated a year ago, and it had called the end of the deal after repeated extensions and delays had caused it to lose money.
“The uncertainty has resulted in a disruption in the company’s supply relationships, leading to a significant decline in the company’s revenue and the implementation by the company of significant cost reductions including the layoff of employees,” it said in its statement.
It is the second major corporate manoeuvre to come unstuck for CBD Energy and its serial deal-maker CEO Gerry McGowan in the last two years. McGowan is the former head of Impulse Airlines.
The AusChina Energy joint venture created with Chinese energy giants Datang and Hianwei with much fanfare in 2011 fell through last year, although CBD enlisted the help of Banco Santander, and latterly the Clean Energy Finance Corp, to fund the proposed development of the Taralga wind farm in New South Wales.
Another proposed purchase of the Neighbourhood Energy electricity retailer also came to nought.
McGowan said last year that a merger with Westinghouse would give it access to innovative technology – it was the first to develop AC panels – a niche position in the US solar PV market, and greater access to capital to support its ambitious international growth, with wind and solar projects planned in Europe, Asia, Australia and now the US.
In its most recent accounts, CBD Energy had said its future was still clouded by its debt obligations. Its shares have been suspended for the past week pending the outcome of the talks with Westinghouse.
As it is, Westinghouse Solar looks likely to lose its right to use the Westinghouse name in any case and will seek a new name. It was supposed to pay $1 million a year for the use of the name, but had fallen behind in payments and Westinghouse Electric has issued a breach of notice which will force it to find a new name.
It also announced the resignation of Robert F. Kennedy, Jr, who has been a vocal advocate for the solar industry, and his push to have solar on every rooftop, after less than two years on the board.