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(Bloomberg) — SunPower Corp. plunged the most ever in intraday trading after it breached a credit agreement and said there is “substantial doubt” about its ability to continue operating.
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Shares of the rooftop solar company slumped as much as 41%. SunPower, which is majority owned by French energy giant TotalEnergies SE, said a subsidiary defaulted under its credit agreement due to a delay in third-quarter financial statements, according to a filing Monday.
If SunPower’s lenders demand immediate repayment, the company wouldn’t have enough liquidity to meet its obligations and pay its liabilities, the company said. “As such, substantial doubt exists about the company’s ability to continue as a going concern.”
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SunPower could be on the hook for more than $65 million, analysts at Roth Capital Partners said in a research note Monday. “SunPower’s cash flow challenges could cascade and result in meaningful cash flow constraints” for dealers of the solar company.
Representatives of SunPower didn’t immediately respond to an email seeking comment.
Home solar companies have been battered by a slowdown in sales triggered by rising interest rates, which made it more expensive for customers to borrow to pay for panels. The industry’s woes are part of a larger collapse in clean-energy stocks driven in part by central bank tightening. SunPower shares have fallen more than 75% this year as the company has struggled with rising rates.
Read more: Worst of the US Rooftop Solar Slump Is Over, Sunnova CEO Says
–With assistance from Tope Alake and Mark Chediak.
(Updates with analyst quote in fourth paragraph.)
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