SunPower has disclosed a breach of its credit agreement, raising uncertainties about its ability to sustain operations. The breach, outlined in a regulatory filing, stems from the company's delay in submitting third-quarter financial results, triggering lenders to demand the immediate repayment of $65.3 million or pursue alternative remedies.
Although SunPower secured a temporary waiver until January 19, 2024, enabling access to $53.7 million in revolving commitments, the company acknowledged potential non-compliance with certain debt covenants, which could lead to further defaults. SunPower is actively seeking additional waivers and exploring various funding alternatives, but it cautioned that the availability of such financing is not guaranteed.
See also: SunPower secures $550m loan from KKR to finance solar energy loans
The recent breach compounds SunPower's challenges, as it had already revised its fiscal year 2023 guidance downward due to diminished consumer demand and delayed revenue recognition. The company adjusted its net loss forecast for the year to $165-175 million and scaled back residential customer estimates from up to 90,000 to a maximum of 80,000.
In the third quarter of 2023, SunPower reported a net loss of $32 million, a significant downturn compared to a net income of $138.4 million in the same period the previous year and a net loss of $30.3 million in the second quarter of 2023.
Additionally, Maxeon Solar Technologies, a solar manufacturer that separated from SunPower in 2020, announced a global workforce reduction of about 22% and operational realignments, including phasing out its Maxeon 6 interdigitated back contact modules.
See also: SunPower Secures $450 Million Financing for Residential Solar and Storage Loan Program
In a parallel development, US microinverter supplier Enphase Energy revealed plans to reduce its global workforce by approximately 10%, comprising around 350 contractors and employees. This move is part of the company's strategy to align its workforce and cost structure with current market conditions, citing turbulence in the global solar market over the past year.
The solar market's challenges, including decreased consumer demand and uncertainties related to California's NEM 3.0 transition, have prompted Enphase Energy to reshape its operations. The restructuring plan, expected to conclude by the first half of 2024, includes the cessation of operations at manufacturing locations in Romania and Wisconsin, focusing on production in the US.
