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SolarCity Says Tesla Talks Delayed Closing Project Financing

A SolarCity Corp. Residential Solar Panel Installation Ahead Of Earnings FiguresA SolarCity Corp. Residential Solar Panel Installation Ahead Of Earnings Figures
A worker lays down a solar panel on a rooftop.Sergio Flores—Bloomberg via Getty Images

SolarCity Corp, which recently accepted Tesla Motors (TSLA) $2.6 billion takeover offer, said it experienced greater-than-usual delays in closing new project financing commitments due to the takeover talks.

Tesla first made an offer for SolarCity, which is backed by Tesla founder Elon Musk, on June 21 as part of Musk’s ambitious plans for a carbon-free energy and transportation company. The solar company accepted the offer on Aug. 1.

On the same day, SolarCity said installations rose 6.3% to 201 megawatts (MW) in the second quarter ended June 30. It, however, cut its full-year installation forecast for a second time by 100 MW to 900-1,000 MW, citing lower residential bookings in the first half of the year.

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SolarCity, known for its innovative no-money-down financing schemes that had spurred a rapid growth in installations, said on Tuesday that the talks with Tesla led to project financing delays of about 30 days.

Several financings expected in June actually closed in July, and while this negatively impacted cash balance at the end of the second quarter, it is expected to have a positive impact at the end of the third quarter, SolarCity said.

The company also reported a smaller-than-expected loss for the quarter as the rise in installations helped revenue surge 80.7% to $185.8 million.

Net loss attributable to shareholders more than doubled to $55.5 million, or 56 cents per share, from $22.4 million, or 23 cents per share, as expenses jumped 51%.

Wall Street Isn’t a Fan of the Tesla-SolarCity Deal

On an adjusted basis, the company posted a loss of $2.32 per share, while analysts on average were expecting a loss of $2.44, according to Thomson Reuters.

The company, which has been burning through cash, has come under pressure from rivals offering low-cost solar energy from utility-scale installations, and because some state governments have reined in subsidies that encouraged rooftop solar.

In a bid to stay relevant, SolarCity in May introduced a set of services for utilities, including development of solar power plants, battery storage, and other grid planning resources.

Elon Musk Says Tesla and SolarCity Could Be $1 Trillion Company

However, the company said late last year it would now slow its pace of growth to focus on generating cash.

SolarCity’s shares were up 0.2% at $24.60 in extended trading on Tuesday. Tesla’s stock swap offer had valued SolarCity at $25.37 per share.

Up to Tuesday’s close, the stock had gained about 16 percent since Tesla made its offer in June.