Citing “feedback from the market,” SunPower Corp. has decided to stop seeking a replacement partner in 8point3 Energy Partners, a yieldco established with First Solar Inc., and instead follow First Solar in attempting to sell off its stake in the joint venture.
In April, First Solar announced plans to divest its interests in 8point3 in order to gain capital and focus on its ongoing restructuring initiative. At the time, though, SunPower had said it would evaluate its options and indicated it would search for a new partner with which to share the publicly traded yieldco.
In announcing second-quarter 2017 (Q2’17) financial results on Tuesday, Tom Werner, president and CEO of SunPower, revealed the company’s decision to also shed its stake in 8point3.
“In relation to 8point3 Energy Partners, our strategic review process is continuing, but we have received significant initial interest in the acquisition of our general partnership stake or in the sale of the entire partnership,” explained Werner. “Thus, we have made the decision not to actively seek a replacement partner for First Solar and to focus our efforts on the monetization of our ownership stake in the partnership. In the event we complete a sale of our ownership stake in 8point3, we believe the proceeds will provide us with additional resources to deleverage our balance sheet and retire our 2018 convertible bonds to minimize shareholder dilution and continue to execute on our restructuring plan.”
Under the yieldco model, First Solar and SunPower, as creators and sponsors of 8point3, have been selling operational projects to their yieldco – a relationship that provides 8point3 with a steady project pipeline to own and operate and the sponsors with more capital for future projects. However, both First Solar and SunPower also launched programs last year to streamline their operations in an effort to remain competitive amid global market challenges.
For Q2’17, SunPower reported more financial losses, but the company noted its restructuring efforts continue and suggested progress is being made.
“Strategically, we continue to believe that our restructuring program will enable us to successfully navigate the current market transition while positioning us for improved financial performance,” said Werner. “In the near term, our focus remains on maximizing cashflow through project sales, lower operating expenses, and the potential monetization of non-core assets.”
For its part, First Solar recently reported solid Q2’17 financial results as the company follows through with its accelerated transition to produce new Series 6 modules. Furthermore, 8point3, itself, also recently reported positive Q2’17 results.