Solar company files for bankruptcy protection
March 13, 2017
• Sungevity says Chapter 11 reorganization will strengthen balance sheet
• Enters into an asset purchase agreement led by Northern Pacific Group
Oakland-based Sungevity Inc., which sells solar power systems to residential and commercial customers in the Central Valley and elsewhere in California, has filed for Chapter 11 bankruptcy protection.
It says operations will continue as normal during a restructuring.
In connection with the restructuring process, the company has entered into an asset purchase agreement with a group of investors, led by Northern Pacific Group. Under the terms of the agreement, Northern Pacific Group will acquire substantially all of the company's assets, including the equity interests in the European operations.
While Sungevity's European operations are part of the transaction, their day-to-day operations will not be impacted as a result of the Chapter 11 proceedings in the U.S.
The purchase agreement sets the floor, or minimum acceptable bid, for an auction under the supervision of the court, which is designed to achieve the highest available offer. Sungevity expects to complete its financial restructuring and sale through an expedited process. A final sale approval hearing and closing of the sale is expected to take place by the end of April.
To provide capital for the company's operations and to fund the auction and sale process, the group of investors has committed to provide the company with up to $20 million in financing. Subject to interim court approval, the financing will be immediately available to the company, to be used to fund the company's day-to-day operations, and pay any expenses related to the Chapter 11 proceedings.
"The agreement we have reached with the team led by Northern Pacific Group and its co-investors is a testament to their confidence in the future of Sungevity's business,” says William Nettles, Sungevity's newly appointed chief administration officer. “The actions we have announced today will allow Sungevity to emerge as a stronger and more competitive company.”
"The Board and its advisors reviewed a range of options and ultimately decided that a court-supervised sale represents the best path forward for our customers, suppliers, employees and business partners," adds Andrew Birch, Sungevity's chief executive officer. “Our ample on-hand inventory and uninterrupted installment contracts position us well to continue fulfilling our customers' orders.”