SolarCity Corp (NASDAQ:SCTY) is still raising funds even with a potential merger with Tesla Motors Inc (NASDAQ:TSLA) hanging in the background. The Elon Musk-backed solar firm confirmed that it raised more than $300 million in debt financing and tax equity for solar projects. It remains unclear if the SolarCity board will approve a merger with Tesla.
SolarCity Corp Gets Some Funding for Solar Projects
This year has been the year for SolarCity to generate a lot of financing to maintain and expand operations. The rooftop solar installer doesn’t seem to be slowing down anytime soon.
SolarCity announced Monday that it raised $345 million in tax equity and raised its debt aggregation facility by $110 million. These new funds will help the firm construct new solar panel projects and maintain the current infrastructure of its solar projects.
The new funds were put together with 30 different banks and corporate partners.
So far in 2016, SolarCity has raised $1.5 billion. This sends a clear message to investors and analysts on Wall Street that it’s in good financial shape. Despite the controversy behind the possible Tesla deal and slower-than-projected growth in 2016, SolarCity is painting the picture that it can grow on its own.
After the announcement was made, SolarCity’s stock climbed more than two percent to beyond $26 a share. However, it quickly pared those gains as the stock has slipped 0.1 percent Tuesday. Year-to-date, the stock is down by 49 percent.
The latest incoming funds come as SolarCity is celebrating its brand new gigafactory and proclaiming that it will revitalize the city of Buffalo. New York Governor Andrew Cuomo has pledged that Upstate New York will become the manufacturing powerhouse of the 21st century, and won’t just be the epicenter for spicy chicken wings and horrible winter weather.
Reportedly, the gigafactory is near completion and will generate economic buzz across the state.
“Manufacturing is scheduled to begin in 2017,” SolarCity CEO Lyndon Rive said in a statement. “SolarCity has committed to employ at least 1,460 people in the city of Buffalo, with 500 jobs at the manufacturing facility. We will employ a total of 5,000 people in New York state by the 10th anniversary of the completion of the facility.”
SolarCity Corp’s Troubles With Tesla Merger
Musk and Rive are perhaps jubilant over a potential merger between SolarCity and Tesla. But it appears that most investors, analysts and shareholders are not as ecstatic about integrating the two firms.
Not only has there been controversy since Musk made the announcement last month, the scandals and complaints continue to pile on. Critics of the move believe that it’s simply a family affair. Many are related to each other and others are connected in one way or another to both firms.
For instance, Rive is Musk’s cousin; Kimbal Musk, the director of Tesla’s Board of Directors, is Elon Musk’s brother; and Donald Kendall, a SolarCity board member is the only person without any relationship or connection to Musk.
“This is particularly questionable when six out of our seven board members have ties to SolarCity,” a CtW Investor Group letter to Tesla noted. “This raises a serious question about whose interests the board is serving — the stockholders of Tesla or the stockholders of SolarCity.”
The ethics and the corporate governance behind the merger are now coming into question. This is possibly the motivating factor behind the growing short interests in both SolarCity and Tesla.