Module manufacturer Maxeon says that 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 their compliance with the Uyghur Forced Labor Prevention Act (UFLPA).
From pv magazine Global
Maxeon, a Singapore-based PV module manufacturer, said in its second-quarter earnings report that U.S. Customs and Border Protection has detained solar panels imported from its module factories in Ensenada and Mexicali, Mexico, for the first time. The company explained that the US authorities are trying to determine whether the panels comply with the UFLPA.
“These detentions involved both Performance line panels manufactured in our Mexicali 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 not related to any concerns specific to Maxeon.”
The company said it is fully cooperating with the agency’s information requests, maintaining continuous contact with the authorities to facilitate the investigation and address their inquiries. It also said it is unsure when the panels will be released or when it will resume panel imports into the United States.
“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 of China for which we pay a meaningful premium compared to polysilicon produced within China,” said the manufacturer. “Based on our internal and third-party reviews, we believe our supply chains are in compliance with all relevant rules and regulations, as well as leading ESG-standards, but have no visibility into the [the border agency’s] process or timing, and are therefore uncertain as to when we will be able to recommence deliveries into our largest end-market.”
In May, Chinese wafer manufacturer TCL Zhonghuan revealed a plan to become a majority shareholder of Maxeon. The Chinese company said it would finalize the deal through a number of financial transactions, including the issuance of convertible bonds and additional shares via private placement.
TCL Zhonghuan said it aims to use up to $197.5 million for the acquisition, which will increase its shareholding in Maxeon from 22.39% to a controlling stake of at least 50.1%. If the transaction is completed, Maxeon will become a subsidiary controlled by TCL Zhonghuan, and its results will be consolidated into the Chinese company’s financial statements.
“The series of major investments we announced yesterday in conjunction with our strategic partner, TZE, will fortify our balance sheet, and this recapitalization places Maxeon in a solid financial position and reinforces our role as a leading participant in the renewable energy market,” a Maxeon spokesperson told 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 recorded $184 million in revenue and shipped 526 MW of panels.
“GAAP operating expenses for this quarter stood at $62 million and included a provision for expected credit losses of $11 million resulting from SunPower Corp.’s recent bankruptcy filing, largely associated with unsecured indemnifications for ongoing litigation and warranty claims inherited from the spinoff in 2020,” it said.
Given the current challenges, Maxeon did not offer guidance for the third quarter and withdrew its full-year 2024 forecast.
“Due to these uncertainties as well as the rolling closing of the recapitalization-related transactions and related note conversions, we will not conduct a conference call to discuss second quarter results,” it said. “We intend to resume quarterly earnings conference calls once the business has stabilized, and we can offer more meaningful insights on current business metrics and future expectations.”
