Residential solar installer Lumio announced it has filed for Chapter 11 bankruptcy.
This marks yet another U.S. residential solar company has that has gone bankrupt, adding to a growing list of companies that has reached bankruptcy due to the economic environment of high interest rates and regulatory turmoil in California.
However, unlike solar giant SunPower, which closed business for good, Lumio will continue to operate. The company said it anticipates completing the sale process in less than two months. During the sale process, Lumio’s operations will continue as usual without interruption.
Image: Lumio
Lumio said it will continue its prepetition sale process through a court-supervised process designed to elicit the highest or otherwise best bid for its assets to maximize value for all stakeholders. A sale transaction will provide certainty regarding the continuation of the business for employees, customers, and trade creditors whose claims will be assumed in the sale, said the company.
Before its Chapter 11 filing, Lumio entered a stalking horse asset purchase agreement with an affiliate of White Oak Global Advisors, Lumio’s primary senior secured lender. White Oak proposes to acquire substantially all of the company’s assets for a total purchase price of approximately $100 million in the form of a credit bid. If selected as the successful bidder, White Oak also intends to offer significant equity ownership to the Company’s employees.
“Today’s announcement marks an important step forward for Lumio and a continuation of our deliberate efforts to position the business with the strategic, operational, and financial foundation to operate at the forefront of the solar industry as it enters its recovery phase,” said Andrew Walton, chief executive officer at Lumio. “With enhanced financial stability and the support of new ownership following the completion of our sale process, we will be well-positioned to capitalize on growth opportunities and better serve our customers through every step of their switch to solar.”
Lumio has also entered into an agreement with White Oak to receive $8 million of debtor-in-possession financing which, following Court approval, is expected to support operations in the ordinary course as the company completes its sale process.
Morris, Nichols, Arsht & Tunnell LLP is serving as legal advisors, Houlihan Lokey is serving as investment banker, and C Street Advisory Group is serving as strategic communications advisor to the company.
White Oak is a global alternative asset manager that manages $9.7 billion of balance sheet assets.
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