Complete Solaria (NASDAQ: CSLR) stock surged during intraday trading Monday following the company’s announcement of eliminating $67.6 million in private equity debt.
Complete Solaria has announced that Carlyle and Kline Hill Partners, its private equity (PE) providers, have canceled $67.6 million in debt from its balance sheet, releasing it from obligations.
On May 15, 2024, the company revealed an agreement with Carlyle to nullify all financial claims in exchange for $10 million in cash. Complete Solaria finalized a similar deal with Kline Hill Partners on Monday, with the PE firm accepting $8 million. To facilitate these settlements, T.J. Rodgers, CEO of Complete Solaria, increased his investment from $10 million to $18 million.
Rodgers highlighted the importance of this press release, stating,
“Complete Solaria is free of all prior private equity debt obligations, having eliminated $67.6 million of long-term debt from our balance sheet.”
Initially, Rodgers expected the company to be cash-strapped following the settlements. However, on closing day, June 30, Carlyle and Kline Hill Partners opted to reinvest the $18 million payment into Complete Solaria after reviewing the company’s investor-friendly convertible debenture offering. This offering featured a 12% coupon and a 50% conversion premium ($1.68 strike price) with no covenants or securitization terms, which both PE providers found compelling.
Rodgers explained,
“My investment in the convertible debenture will cycle through the company twice—first to pay off the private equity partners and then to provide $18 million in new working capital.”
He also expressed gratitude to key individuals involved in the process, including Andrew Kapp of Carlyle, Rick Orlando, CEO Mike Bego of Kline Hill Partners, and Andrew Apthorpe of Cantor for his expertise in developing the convertible debenture vehicle.
Complete Solaria (NASDAQ: CSLR) Stock Movement
CSLR stock soared 32.14% on Monday, closing at $1.48, marking an 11.28% increase for the week. The trading volume was 132,656,752 shares, significantly higher than the average daily volume of 3.59 million.
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