Complete Solar Raises $40.5 Million for SunPower Asset Acquisition

Rhea-AI Summary

Complete Solar (Nasdaq: CSLR) has raised $40.5 million to cover the remaining closing costs of its $45 million bid to acquire certain SunPower (OTC: SPWRQ) business units. The funding was secured through a convertible debenture with a 7% coupon and a 25% conversion premium. The company has also created a $30 million Equity Line Of Credit (ELOC) to address potential bidding escalation in the auction. As the 'stalking horse' bidder in SunPower's Chapter 11 bankruptcy, Complete Solar has been granted access to SunPower managers and executives to create a future plan. The proposed new SunPower will be smaller, employing about half the current workforce. Notably, 1,925 SunPower and Blue Raven employees have already signed up for interviews with Complete Solar.

Positive

• Raised $40.5 million to cover acquisition costs without using incremental cash
• Secured additional $30 million ELOC for potential bidding escalation
• Gained 'stalking horse' bidder status in SunPower's bankruptcy proceeding
• Strong interest from 1,925 SunPower and Blue Raven employees for potential employment
• Support and investment from SunPower's founding CEO, Dick Swanson

Negative

• Potential dilution for existing shareholders due to convertible debenture issuance
• Risks associated with acquiring assets from a bankrupt company
• Planned reduction of workforce by approximately 50% in the new SunPower structure

Financial Analyst

The $40.5 million fundraising through a convertible debenture is a strategic move by Complete Solar to finance its $45 million bid for SunPower's assets without depleting cash reserves. The 7% coupon and 25% conversion premium indicate investor confidence in the company's growth potential. The additional $30 million ELOC provides flexibility for potential bidding escalation, showcasing prudent financial planning.

The involvement of high-profile investors and former SunPower executives lends credibility to the acquisition plan. However, investors should note that the restructuring involves significant workforce reduction, which may impact short-term operational efficiency. The strong employee interest in joining the new entity is a positive sign for talent retention and continuity.

Solar Industry Expert

Complete Solar's acquisition of SunPower assets marks a significant consolidation in the solar industry. The plan to create a leaner, more focused SunPower could potentially revitalize the brand and improve its market position. The involvement of SunPower's founder and former executives suggests a strategy that leverages institutional knowledge while adapting to current market dynamics.

The emphasis on residential solar, with only 5% of American homes currently having solar installations, indicates substantial growth potential. However, the success of this venture will depend on effective integration of assets, streamlining operations and navigating the competitive landscape of the solar market.

Legal Expert

The "stalking horse" position in SunPower's Chapter 11 bankruptcy proceedings gives Complete Solar a strategic advantage in the bidding process. This status, combined with the Asset Purchase Agreement allowing direct employee engagement, provides a unique opportunity for talent acquisition and business continuity planning.

However, investors should be aware of potential legal complexities in bankruptcy proceedings, including possible challenges from other bidders or creditors. The success of the acquisition will partly depend on navigating these legal intricacies and ensuring compliance with bankruptcy court requirements throughout the process.

LEHI, Utah, Sept. 09, 2024 (GLOBE NEWSWIRE) -- Complete Solar Holdings, Inc. d/b/a Complete Solar (“Complete Solar” or the “Company”) (Nasdaq: CSLR), a solar technology, services, and installation company, today announced that it had raised an additional $40.5 million to cover the remaining closing costs of its $45 million bid to take over certain SunPower (OTC: SPWRQ) business units without using incremental cash. The vehicle to raise the funds was a convertible debenture with a 7% coupon and a 25% conversion premium, bringing the “strike price” of the underlying shares to $2.1375, based on the closing price of $1.71. The board has authorized management to issue a limited number of additional convertible debenture notes under the same terms. The company said it has also created and registered a $30 million Equity Line Of Credit (ELOC) to address bidding escalation in the auction.

Cantor Fitzgerald & Co., served as Sole Financial Advisor and Placement Agent to Complete Solar, Arnold & Porter acted as legal counsel to the Company in connection with the transaction and White Lion Capital set up the ELOC.

T.J. Rodgers, Complete Solar CEO, said, “As the ‘stalking horse’ bidder in a Chapter 11 bankruptcy, we are guaranteed the first bid in SunPower’s bankruptcy proceeding, and we have been allowed limited access to a group of SunPower managers and executives, including Tom Werner, former SunPower CEO, to create a plan for SunPower’s future. We showed that plan to selected investors under a non-disclosure agreement, and they joined me in funding it.”

Rodgers concluded, “The new SunPower envisioned in our plan will be much smaller, employing about half the people on day one. Our Asset Purchase Agreement allows Complete Solar to interview and even make contingent offers to SunPower employees, but only directly and without assistance from SunPower. We were therefore overjoyed that when we activated our interviewing site last week, 1,925 SunPower and Blue Raven employees signed up within a few hours. This will help insure that SunPower, founded in 1985, remains a flagship solar company and will continue to play a pivotal role in providing pollutionless power for American homes, only five percent of which have solar today.”

Dick Swanson, the Founding CEO of SunPower, said, “I first connected with T.J. Rodgers in 2000 when he personally invested in SunPower and helped us build an automated solar cell line in the Philippines. T.J. was actually our chairman when we went public in 2005 and helped build SunPower into the highly regarded company it became. I’ve reviewed his plan to build a New SunPower and invested in it.”

About Complete Solar
Complete Solar is a solar company and end-to-end customer offering, which includes financing, project fulfilment and customer service. Complete Solar’s digital platform together with premium solar products enable one-stop service for clean energy needs for customers wishing to make the transition to a more energy-efficient lifestyle. For more information visit https://www.completesolar.com and follow us on LinkedIn.

Forward Looking Statements 
This press release may contain certain forward-looking statements within the meaning of the federal securities laws with respect to the referenced transactions. These forward-looking statements generally are identified by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” and similar expressions, but the absence of these words does not mean that a statement is not a forward-looking statement. Forward-looking statements are forecasts, predictions, projections and other statements about future events that are based on current expectations, hopes, beliefs, intentions, strategies and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release the price of Complete Solar’s securities may be volatile due to a variety of factors, including changes in the applicable competitive or regulatory landscapes, variations in operating performance across competitors, changes in laws and regulations affecting Complete Solar’s business, and changes in the combined capital structure; the ability to implement business plans, forecasts, and the evolution of the markets in which Complete Solar will compete.

Readers should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2024. Such filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Complete Solar assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

For investor inquiries, please contact:
Complete Solar, Inc.
Genevieve Swords
Phone: +1 (801) 477-5847
InvestorRelations@CompleteSolar.com

Source: Complete Solar, Inc.

FAQ

What is the value of Complete Solar's bid for SunPower assets?

Complete Solar (CSLR) has made a $45 million bid to acquire certain business units of SunPower (SPWRQ) in the bankruptcy proceedings.

How much additional funding did Complete Solar raise for the SunPower acquisition?

Complete Solar (CSLR) raised an additional $40.5 million through a convertible debenture to cover the remaining closing costs of its SunPower asset acquisition bid.

What is the conversion premium and 'strike price' for Complete Solar's convertible debenture?

The convertible debenture issued by Complete Solar (CSLR) has a 25% conversion premium, resulting in a 'strike price' of $2.1375 for the underlying shares, based on the closing price of $1.71.

How many SunPower and Blue Raven employees have shown interest in joining Complete Solar?

1,925 SunPower and Blue Raven employees signed up for interviews with Complete Solar (CSLR) within a few hours of the company activating its interviewing site.

What is the planned size of the new SunPower under Complete Solar's management?

According to Complete Solar's (CSLR) plan, the new SunPower will be smaller, employing about half the current workforce on day one of the acquisition.