TPI Composites files for bankruptcy, sees stock drop 40.6%

TPI Composites, a global wind blade manufacturer, filed for Chapter 11 bankruptcy protection to address significant financial challenges, including over $1 billion in debt. The company's shares fell 40.6% and are now trading at $0.17, a 96.6% decrease from their 52-week high. TPI has secured up to $82.5 million in financing from Oaktree Capital Management, which is expected to take over the company. The company warned that its common stock is highly speculative and may be canceled and delisted from the Nasdaq exchange.

Wind blade manufacturer TPI Composites, Inc. (NASDAQ:TPIC), with a market capitalization of just $14.25 million, announced Monday that it has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas [1]. The company has been struggling with weak financial health, reflected in its concerning current ratio of 0.88. TPI has secured up to $82.5 million in debtor-in-possession financing from senior secured lenders affiliated with Oaktree Capital Management, subject to final documentation and court approval [1].

The debtor-in-possession (DIP) package includes $27.5 million in new money and $55 million rolled up from the company’s existing senior secured credit facility. Additionally, TPI secured approval for the use of approximately $50 million in cash collateral to support ongoing operations during the restructuring process [1]. The Scottsdale-based company, which manufactures composite wind blades for wind turbine manufacturers, stated it plans to continue normal operations throughout the bankruptcy process.

The company has filed motions seeking court authorization to support its operations, including payment of employee wages, salaries, and benefits. TPI operates factories in the U.S., Mexico, Türkiye, and India, with additional engineering development centers in Denmark and Germany. The company has engaged Weil, Gotshal & Manges LLP as legal counsel, Jefferies LLC as financial advisor, and Alvarez & Marsal North America as restructuring advisor.

TPI Composites aims to reach an agreement with stakeholders on a plan of reorganization that will allow it to right-size its balance sheet and compete effectively in the current economic environment [1]. The company's shares fell 40.6% and are now trading at $0.17, a 96.6% decrease from their 52-week high. TPI warned that its common stock is highly speculative and may be canceled and delisted from the Nasdaq exchange.

The financial results for the first quarter surprised analysts and led to a notable reaction in the market. Despite recent progress, industry-wide pressures have created financial challenges that must be addressed [1].

References:
[1] https://www.investing.com/news/company-news/tpi-composites-files-for-chapter-11-bankruptcy-secures-825-million-dip-93CH-4183853