SunPower's stock charges up after additional financing, waivers secured

By Tomi Kilgore

Upbeat financing news comes as the solar company also reported downbeat quarterly results

Shares of SunPower Corp. were boosted Thursday, after the troubled solar panels and systems company said it secured new funding and waivers from its financial partners, which the company believes will allow it to "navigate current industry headwinds."

The company also reported a wider-than-expected fourth-quarter loss and revenue that fell short of forecasts.

The stock (SPWR) charged up 17% in premarket trading toward a two-month high. At current implied prices, the stock would be up 39.4% on the week, which puts it on track for the biggest weekly gain since it soared 47.7% during the week ended Jan. 22, 2021.

The company said it has raised $175 million in capital financing through a loan from Sol Holding LLC, which is majority-owned by TotalEnergies and Global Infrastructure Partners.

The term loan includes $45 million that was already funded to the company in December and January, as well as $80 million in new investment and $50 million available credit if certain financial conditions are satisfied.

In connection with the additional financing, the company agreed to issue "penny warrants" to Sol Holding, which allows Sol to buy up to about 41.8 million SolarPower shares, which would represent about 24% of the shares outstanding. And if the company draws on the additional $50 million credit line, and additional 33.4 million warrants to buy stock will be issued.

"This transaction demonstrates the strong conviction of our financial partners in the long-term value proposition of residential solar, storage and renewable energy services, as well as SunPower's ability to deliver operational excellence for our customers," said Chief Executive Peter Faricy.

The company said it also obtained new long-term waivers from its financial partners, and entered into an amended revolving debt facility which provides access to $25 million in new debt capacity.

In all, the agreements provide the company with $155 million in additional liquidity.

Keep in mind that in the company's latest 10-Q quarterly filing with the U.S. Securities and Exchange Commission, the company said it was in discussion with its lenders regarding waivers under current credit agreements. Without the waivers, the company would not be able to meet its debt obligations, and therefore there was "substantial doubt" about its ability to continue as a going concern.

"With this injection of additional liquidity and working capital to our balance sheet, coupled with substantial cost reductions, SunPower is taking positive steps to position itself to succeed in 2024 and beyond," Faricy said.

Separately, the company said it swung to a fourth-quarter net loss of $123.9 million, or 71 cents a share, from net income of $3.4 million, or 2 cents a share, in the same period a year ago. Excluding nonrecurring items, the adjusted per-share loss of 51 cents was much wider than the FactSet loss consensus of 25 cents.

Total revenue dropped 28.3% to $356.9 million, missing the FactSet consensus of $366.5 million.

For 2024, the company said it expects a net loss of $160 million to $80 million and free cash flow to turn positive in the second half of the year. The FactSet consensus for 2024 net losses is $90.1 million, and for free cash flow is negative $127.2 million.

SunPower's stock has tumbled 74.7% over the past 12 months through Wednesday, while the Invesco Solar ETF TAN has tumbled 41% and the S&P 500 index SPX has rallied 20.6%.

-Tomi Kilgore

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02-15-24 0911ET

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