SolarCity Corp Is $305 Million Richer
- Author: Zachary Reyes Sep 14, 2016,
Sep 14, 2016, 19:32
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon.
SolarCity announced that it raised $305 million in the equity raise that monetizes some of its future cash flow from a 230 MW portfolio of solar assets. The company said that a fund affiliated to Quantum Strategic Partners Ltd injected $305 million in it in exchange for an equity stake.
The announcement yields several benefits for the company, which at this point needs as many as it can get its hands on.
Solar panel installer SolarCity, which is being bought by Tesla Motors, said it had raised $US305 million ($403.18 million) in a cash equity transaction advised by billionaire investor George Soros' hedge fund.
The syndication of a long-dated, fully-amortizing loan is believed to represent a "first of its kind" for distributed solar assets, creating another valuable financing tool for SolarCity. Bank of America Merrill Lynch served as the sole syndication and structuring agent.
The transaction includes a portfolio of assets that produce about 230MW of energy spread across 15 states, with majority installations constructed in 2015 and 2016. The company had $5.2bn in solar energy system assets in a recent balance sheet on June 30. While the business model is viable considering that it eliminates a major barrier to entry for many customers seeking renewable energy, it requires massive investment on the side of SolarCity to complete projects before it can start generating money from them.
These assets will be contracted to $3.1bn in future payments on the basis of net present value (NPV). Visit the company online at www.solarcity.com and follow the company on Facebook & Twitter. Quantum Strategic Partners Ltd ("QSP") is a private investment vehicle that pursues investments globally in a variety of industries and across strategies, including buyouts, growth equity transactions and structured investments.
Need for additional funds - SolarCity Corp.
SolarCity shares bounced up almost 7 percent after the news.