SunPower extends maturity of $130 million convertibles by two years

By Wendy Van Sickle

Columbus, Ohio, March 27 – SunPower Group Ltd. extended the tenor of its $130 million of convertible bonds by two years, according to a notice.

The extension was effected by an agreement entered into on March 24 by the company and with Glory Sky Vision Ltd., Alpha Keen Ltd., Green Hawaii Air Ltd. and Blue Starry Energy Ltd. to amend the bonds, which include a $110 million first tranche and a $20 million second tranche. The bonds will be extended to the later of April 3, 2025 or, if so elected by the bondholders, the 15th business day after the company’s audited financial statements for 2024 are issued.

The bondholders’ internal rate of return on the convertibles under the amendment is higher, at 10% on the new maturity date instead of 8%, increasing the redemption balance due on the new maturity date by about $46.5 million to $158.1 million, but the 10% rate would apply only if there is no asset sale and full payment to bondholders at a redemption price equal to the their entitlement in that event, if the bondholders do not exercise their conversion right or there is no occurrence of certain relevant events.

Prior to the amendment agreement, the maturity date was to be the 15th business day after the company’s audited financial statements for 2022 are issued, which is expected to be around April 17.

The company said its 2022 fiscal year was one of its most challenging since the inception of its green investments business, citing effects of the Covid-19 pandemic, high and volatile feedstock prices arising from geopolitical conflict between Russia and Ukraine, high temperatures during the summer of 2022 and sanctions imposed in Xinjiang cotton that had an impact on some customers of SunPower’s green investment business.

The amendment agreement prevents an immediate redemption and default on the convertibles and the immediate additional dilution of about 15% for shareholders if the bondholders were to elect to exercise their conversion right at a conversion price of S$0.264 for the first tranche and S$0.317 for the second, which would amount to an additional 320,502,904 shares being issued to the bondholders. These conversion prices would have been in effect without the amendment, because the company’s green investment business is subject to a performance target of RMB 325 million in adjusted profit after taxation and minority interests for the fiscal year ended Dec. 31 under the unamended bond terms.

Under the amended terms, there is no change to the conversion prices of S$0.50 for the first tranche and S$0.60 for the second, and the conversion prices will no longer be subject to adjustment based on the performance target.

SunPower said the two-year runway gives it opportunities to explore alternatives and maximize the value of its green investment assets.

SunPower is involved in environmental equipment manufacturing and green investments in China.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.