SunPower grapples with a precarious financial situation, casting doubts on its continuity in business operations. The solar energy company’s breach of a crucial term in a credit agreement has triggered concerns regarding loan recalls from lenders.
The revelation, documented in a regulatory filing on Monday, underscores the potential fallout from the company’s failure to submit its third-quarter financial results promptly. SunPower disclosed that this delay could lead lenders to demand an immediate repayment of $65.3 million in debt.
In response to this critical situation, SunPower has entered discussions with its lenders in pursuit of a waiver. The company emphasizes that failure to secure this waiver could leave it financially strained, impeding its ability to sustain day-to-day operations.
Notably, Raymond James analyst Pavel Molchanov offered a contrasting perspective, stating to Reuters that SunPower’s obstacle primarily revolves around a technical issue. Molchanov expressed confidence that the company should encounter no significant hurdles in obtaining the waiver it requires.
This recent financial hiccup is not the first for SunPower, as earlier this month, the company managed to secure a waiver subsequent to breaching terms in a more extensive credit agreement.
The company’s financial turbulence began to surface in October when it announced plans to restructure its financial statements for the previous year and the initial two quarters. This restructuring stemmed from complications associated with inventory valuation.
Despite these financial setbacks, SunPower disclosed some operational metrics, citing the addition of 18,800 customers in the third quarter. The company entered the fourth quarter with a backlog of 18,400 retrofit customers and 38,000 New Homes customers.
Financially, SunPower reported third-quarter revenue of $432 million but noted a net loss of $32 million, coupled with an adjusted EBITDA of $(1) million. These figures underscore the challenging financial landscape the company currently navigates, amplifying concerns about its future stability.