Vivint Solar Inc (NYSE:VSLR) In Cash Crunch After Sunedison Inc (NYSE:SUNE) Deal Is Terminated

Vivint Solar Inc (NYSE:VSLR) In Cash Crunch After Sunedison Inc (NYSE:SUNE) Deal Is Terminated

Vivint Solar Inc (NYSE:VSLR) is trying to obtain funds after the planned acquisition by Sunedison Inc (NYSE:SUNE) was thwarted. This has adversely affected the company’s operations.

Click Here For More Market Exclusive Updates & Analysis

The residential solar company had $92.2 million in cash and equivalents on Dec 31. This is a decrease from the $261.6 million the company had a year earlier. Vivint stated that it has obtained $200 million in term loans sourced from investment funds.

The company’s operations were adversely affected by SunEdison’s effort to buy it. The controversial $1.9 billion deal led to legal actions from investors. The deal was renegotiated in December. Vivint called the deal off last week after SunEdison failed to meet several deadlines. The company claimed the extended process caused distractions in its ongoing operations such as difficulties to obtain capital.

As per Vivint, the impending SunEdison acquisition and the uncertainties that came with it negatively affected the willingness of entities to enter into financing arrangements with them.

Vivint is now taking legal action against SunEdison. It is also re-examining its operating plan as a result of the cancelation of the merger agreement and the company’s financing requirements.

Vivint’s existing cash and funding will be enough to meet the company’s expected cash requirements for one year minimally.

SunEdison’s cash flow issues made it the center of attention after calling off the deal. Nicole Litvak, GTM Research’s senior solar analyst said the merger was declared last summer. However, Vivint’s installations decreased from Q2 to Q3 in 2015. This was unexpected considering how much the company was growing, and other companies in the market were growing. Litvak hints that the organization may have slowed or halted its recruiting or other operations pending closure of the SunEdison deal.

She added that a few years back Vivint was genuinely novel in the market. They were the only organization selling solar energy door to door. Currently, there are a number of companies doing it. Many of these companies were started by former Vivint employees, so Vivint is no longer unique in the solar market.