SolarCity Corp Secures $345M To Fund New Projects

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SolarCity has revealed that it has raised hundreds of millions of dollars in tax equity and debt financing over the past few weeks. This new financing will be used to build fresh solar panel projects. This revelation comes a month after Tesla expressed its intention to buy the solar company for $2.86 billion.

Sending a positive message to Wall Street

On Monday, SolarCity revealed that it raised its tax equity by $345 million and increased its debt aggregation facility by $110 million. This brings the company’s total project financing to $1.5 billion in 2016. The solar firm states that it has collaborated with 30 different banks and corporate partners on the project financing. The core message that this delivers to Wall Street is that the company is in good financial health and currently has funds to maintain its growth, despite the uncertainty with the Tesla deal and slower projected growth this year.

Several analysts see Tesla’s plan of buying SolarCity as a potential bailout. The solar firm already had around $3.25 billion in debt and $1.23 billion in debt payments due by the end of 2017 when Tesla’s deal was announced. The company plans to build its own solar panels, an expensive and risky move, so it is putting more investments into a large solar factory in upstate New York.

Tesla and SolarCity deal: still confusing?

Elon Musk, the billionaire entrepreneur and Tesla CEO, owns 22% of SolarCity, and his cousin Lyndon Rive is the CEO of the solar firm. Musk recused himself from voting on the deal, which is supposed to be voted on within a couple of months from the mid-June announcement.

According to Musk, the merger of the two firms could prove to be the fairest deal, and together they can emerge as a trillion dollar company creating and selling solar panels to generate energy, battery projects to use the energy, and batteries to store energies and cars.

Many analysts are still confused about the merger, and following the merger announcement in June, Tesla’s stock dropped considerably. However, in the past few weeks, Tesla has recovered its initial loss.

In late 2015, SolarCity said that in order to be cash flow positive by the end of 2016, it plans to slow down its growth. The liquidation of high-profile clean energy giant SunEdison and its administrative uncertainty together contributed to the instability of solar stocks this year.

At 10:30 a.m. Eastern, SolarCity shares were down 0.73% at $25.95. Year to date, the stock is down almost 49%, while in the last year, it is down more than 50%.

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