Module manufacturer Maxeon says U.S. Customs and Border Protection officials have detained all of its panel imports from Mexico since July as the federal law enforcement agency investigates compliance with the Uyghur Forced Labor Prevention Act (UFLPA).
Maxeon, a Singapore-based PV module maker, said in its second-quarter earnings report that U.S. Customs and Border Protection for the first time stopped solar panels imported from its module factories in Ensenada and Mexicali, Mexico. The company explained that US authorities are trying to determine whether the panels comply with the UFLPA.
“These arrests involved both Performance Line panels manufactured in our facility Mexican factory for utility-scale customers, as well as [interdigitated back contact] panels manufactured in our Ensenada factory for DG customers,” the company said. “[The customs agency] has explained that these are routine detentions and are not related to concerns specific to Maxeon.”
The company said it is fully cooperating with the agency’s information requests and is in constant contact with authorities to facilitate the investigation and respond to their questions. It also said it is unsure when the panels will be released or when panel imports into the United States will resume.
“Maxeon has been a long-time ESG leader in the solar industry and a supporter of the UFLPA since its inception. Maxeon continues to require a UFLPA-compliant supply chain for its products imported into the US, including polysilicon produced outside the United States. China for which we pay a meaningful premium compared to the polysilicon produced therein China,” said the manufacturer. “Based on our internal and third-party assessments, we believe that our supply chains comply with all relevant laws and regulations, as well as leading ESG standards, but we have no visibility into the [the border agency’s] process or timing, and are therefore uncertain as to when we will be able to resume deliveries to our largest end market.”
In May, Chinese wafer maker TCL Zhonghuan unveiled a plan to become the majority shareholder of Maxeon. The Chinese company said it would complete the deal through a number of financial transactions, including the issuance of convertible bonds and additional shares through a private placement.
TCL Zhonghuan said it will use up to $197.5 million for the acquisition, which will increase its stake in Maxeon from 22.39% to a controlling stake of at least 50.1%. Once the transaction is completed, Maxeon will become a subsidiary controlled by TCL Zhonghuan, and its results will be consolidated in the Chinese company’s annual accounts.
“The series of major investments we announced yesterday in collaboration with our strategic partner TZE will strengthen our balance sheet, and this recapitalization puts Maxeon in a solid financial position and strengthens our role as a leading participant in the renewable energy market,” said a spokesman. This is what a Maxeon spokesperson said pv magazine at the time.
The company said in its second quarter financial report that it faces significant challenges, mainly due to external market factors and policy issues. During the second quarter, it posted revenues of $184 million and shipped 526 MW of panels.
“GAAP operating expenses for the quarter were $62 million and included a provision for expected credit losses of $11 million due to SunPower Corp.’s recent bankruptcy filing, largely related to unsecured damages for pending litigation and warranty claims inherited from the 2020 spin-off,” the company said.
Given the current challenges, Maxeon did not provide guidance for the third quarter and withdrew its full-year 2024 guidance.
“Due to these uncertainties and the ongoing closing of the recapitalization-related transactions and related note conversions, we will not hold a conference call to discuss the second quarter results,” the report said. “We plan to resume quarterly earnings conference calls once the business has stabilized and we can provide more meaningful insights on current business metrics and future expectations.”
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