Maxeon Solar Technologies, a Singapore-based solar solutions provider, has secured a $97.5 million debt financing from the company’s largest shareholder, TCL Zhonghuan Renewable Energy Technology (TZE). TZE also committed to an additional $100 million equity investment, in each case subject to regulatory approvals.
A majority of the investors holding the convertible notes worth $200 million, maturing in 2025, have consented to swap their securities and the accumulated interest for new bonds maturing in 2028. These new bonds can be converted into equity at the discretion of the noteholders starting from July 2nd, and an amount of $137.2 million is mandated to be converted into equity once TZE makes its equity investment.
The transaction will substantially dilute existing public shareholders, with TZE ultimately becoming a controlling shareholder. The funding infused will be used as capital to support the company’s operations.
Maxeon’s Chief Executive Officer, Bill Mulligan, has indicated that the company has faced difficulties since the third quarter of last year. He attributed these struggles to challenging industry pricing conditions, demand disruptions in the company’s DG business due to higher interest rates and policy changes, and project delays by two of their large-scale customers in the U.S.
These external factors led to underutilized manufacturing operations, increased product costs, and lower revenue and profit than planned.
The company has also recently sold its stake in Huansheng Photovoltaic (Jiangsu) (HSPV) joint venture, along with executing an IP license for shingling technology for their use in utility-scale markets outside of the United States, for $34 million.
According to Mercom’s Q1 2024 Solar Funding and M&A report, announced debt financing for the solar sector in Q1 2024 totaled $6.2 billion in 22 deals, a 59% increase YoY compared to Q1 2023 when $3.9 billion was raised in 17 deals.
Last Month, Matrix Renewables, a global renewable energy company, and Santander Corporate & Investment Banking closed a €300 million (~$322 million) corporate debt financing deal. Matrix secured this financing as Green and Sustainability-Linked, aligning it with the Green and Sustainability-Linked Loan Principles.
