- SunPower Corp. shares plummeted more than 30% after the solar company warned that it could go out of business if creditors decide to demand immediate payment of its debt.
- The solar power equipment and services provider said that it wouldn’t have enough liquidity to cover normal business operations if it had to pay its obligations.
- The company received a temporary waiver through Jan. 19 and noted that it is seeking additional waivers and other funding alternatives.
Shares of SunPower Corp. (SPWR) plunged more than 30% as the solar power equipment and services provider warned that it may not be able to remain in business after failing to make payments on its debt.
The company said that it breached a credit agreement when it didn’t report third-quarter financial results on time, and creditors could demand immediate payment of the $65.3 million that’s owed.
That would mean SunPower “would not have sufficient liquidity to meet its obligations and pay its liabilities arising from normal business operations when they come due.” According to the solar firm, if that occurred, “substantial doubt exists about the company’s ability to continue as a going concern.”
SunPower noted that it received a temporary waiver from creditors earlier this month allowing the firm to hold off on fulfilling its commitments until Jan. 19, 2024. It said that management was “seeking additional waivers and evaluating various funding alternatives” to raise cash and address its liquidity needs.
In October, SunPower announced that it would be restating financial results for 2022 and the first and second quarters of this year because of issues related to how its inventory was evaluated.
SunPower shares had spiked on Friday after Jefferies initiated coverage on the stock with a “hold” rating. With Monday’s reversal, the stock has lost about three-quarters of its value this year.