Yesterday SunPower published a filing with financial regulators which sheds light on its plan to bring in more capital, as well as how much it is willing to pay for this capital.
According to the filing, on August 10 a SunPower subsidiary entered into an agreement to borrow $110 million from Hannon Armstrong under a subordinated loan structure, with proceeds being used for purposes including plans to “retire certain preferred equity”.
SunPower will be paying a pretty penny for this capital, as it comes with a 12% interest rate and limits on prepayments. However, if the rate is high the source of SunPower’s payments is relatively solid, as the company plans to pay it off with net revenues from its residential lease portfolio.
This mezzanine loan comes as SunPower reported improved fundamental profitability in its Q2 results, but will also need to outlay cash to retool its factories to move to its new back-contact technology, not to mention funding its planned acquisition of the SolarWorld Americas factory in Oregon.
It is unclear how much money SunPower will have to raise for the latter project. The manufacturer was sitting on $267 million in cash and equivalents at the end of the second quarter and is drawing in funds from a variety of sources, including $25 million from the sale of its microinverter business to Enphase.