The takeover talks with Tesla have resulted in some inconveniences for SolarCity. The solar firm, which recently accepted Tesla’s takeover offer of $2.6 billion, said it encountered greater-than-usual delays in concluding new project financing obligations because of the takeover talks. The discussions resulted in project financing delays of about 30 days.
Tesla to blame for project financing delays
SolarCity is famous for its inventive no-money-down financing plans, and it claimed on Tuesday that it was the talks with Tesla that prompted project financing delays for about 30 days. According to the solar firm, several financing plans that were anticipated in June, ended up getting closed in July. This affected the cash balance toward the end of the second quarter, but it will have a positive effect toward the end of the third quarter.
Tesla – in-line with Elon Musk’s plan for a carbon-free energy and a transportation company — first made its offer to SolarCity on June 21. The solar firm accepted the offer on August 1, and the same day, the company said that installations rose from 6.3% to 201 megawatts (MW) in the second quarter, which ended on June 30. However, the company axed its entire year installation forecast for a second time by 100 MW to 900-1,000 MW, referring to lower-than-expected residential bookings in the first six months of the year.
The solar company reported a lower-than-anticipated loss as the ascent in installations helped revenue grow 80.7% to $185.8 million. But the net loss attributable to shareholders increased to $55.5 million or 56 cents a share from $22.4 million or 23 cents a share as costs bounced 51%. On adjusted basis, the solar firm posted a loss of $2.32 per share, while analysts were expecting a loss of $2.44 per share, as per Thomson Reuters.
SolarCity aims to generate more cash
SolarCity, which has been burning cash, felt threatened after some governments reined in subsidies that encouraged rooftop solar products and adversaries began offering low-cost solar energy from utility-scale installations.
In May as part of its efforts to stay relevant, SolarCity revealed a set of services for utilities, including the development of solar power plants, battery storage, and other grid planning resources. But late last year, the company said it would moderate its pace of growth to concentrate on producing more money.
Up to Tuesday’s close, SolarCity’s stock had increased by around 16% since Tesla made its offer in June. On Tuesday, SolarCity closed up 0.95% at $24.55. Year to date, the stock is down almost 52%, while in the last year, it is down more than 53%. Tesla closed up 1.29% at $229.08 on Tuesday, and year to date, it’s down almost 4%.