US residential solar provider SunPower has filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code.
At the same time, the company entered into an asset purchase agreement (APA) with residential solar company Complete Solaria—which is the result of a merger between companies Solaria Corporation and Complete Solar—to serve as the stalking horse buyer for assets associated with SunPower’s Blue Raven Solar business, New Homes business and non-installing Dealer network. Such a buyer is a company nominated by a company filing for bankruptcy to make an initial bid for its assets, to set a benchmark for other potential buyers to make bids.
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Subject to court approval, the assets would be sold for US$45 million in cash by mid to late September. SunPower aims to continue a sale process for its remaining assets and effectuate any resulting sale transactions pursuant to Section 363 of the US Bankruptcy Code.
This announcement comes less than a month after investment bank Roth Capital published a letter from SunPower—obtained from industry contacts—saying that the company had stopped several operations, including new shipments and financing options.
Tom Werner, executive chairman at SunPower, said: “In light of the challenges SunPower has faced, the proposed transaction offers a significant opportunity for key parts of our business to continue our legacy under new ownership. We are working to secure long-term solutions for the remaining areas of our business, while maintaining our focus on supporting our valued employees, customers, dealers, builders, and partners.”
SunPower’s challenges prior filing for Chapter 11
Since last year, the residential solar provider struggled to remain afloat, when in December it breached a credit agreement. At the time, SunPower said it did not have the ability to borrow from the remaining capacity of US$53.7 million of revolving commitments as a result of the filing, but it had obtained a temporary waiver until 19 January 2024.
However, prior to that, the company had been sued for allegedly inaccurately reporting the costs of revenue and inventory metrics. Due to this, SunPower restated previously issued financial statements for fiscal year 2022 and the first two quarters of 2023. At the end of the fiscal year 2023, the company registered a net loss of US$247 million.
Not long after posting its financial results for the fiscal year of 2023 in February 2024, the residential solar provider managed to secure over US$300 million in project financing commitments for its residential solar and storage lease programmes. During that same week, SunPower announced the departure of its then-CEO, Peter Faricy, without mentioning the reason for his departure.
In April 2024, the company made around 1,000 job cuts and closed business segments. In addition to the restructuring, it identified misstatements in financial results for the fiscal year 2022. Before ceasing a number of activities, including new shipments, in July this year.
