Canada's ATS Automation Tooling Systems Inc said it had failed to secure a buyer for its French solar unit due to the drop in demand for solar products in Europe, sending its shares down as much as 9 percent.
Cormark Securities analyst MacMurray Whale, who lowered his rating on the company's stock to "buy" from "top pick", said the delay in divestment was not only disappointing for investors it may also have a negative impact on ATS' results.
"Because terms could not be agreed to on a sale to a third party, there is a greater likelihood that Photowatt France may have to be closed or otherwise sold at a value much lower than (what) management previously expected or even at a loss," he said in a note to clients.
ATS, which makes factory automation systems and solar energy equipment, has been impacted by lower subsidies for solar power in France and Germany that has hurt selling prices.
ATS Automation said it was looking at a broader set of strategic options for its solar businesses at France and Canada.
The company — which serves customers in industries such as life sciences, computer electronics, energy, transportation and consumer products — said it was committed to the separation of its solar business, but expects a modest delay to the previously announced timeline.
ATS Automation shares were trading down 44 Canadian cents at C$6.19 on Monday morning on the Toronto Stock Exchange.
