SolarCity says Tesla talks delayed closing project financing
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A SolarCity vehicle is seen on the road in San Diego, California, U.S. June 22, 2016. REUTERS/Mike Blake
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By Arathy S Nair
(Reuters) - Solar panel installer SolarCity Corp (NASDAQ: SCTY), which recently accepted Tesla Motors Inc's (NASDAQ: TSLA) $2.6 billion takeover offer, said it experienced greater-than-usual delays in closing new project financing commitments due to the takeover talks.
Tesla first made an offer for SolarCity, which is backed by Tesla founder Elon Musk, on June 21 as part of Musk's ambitious plans for a carbon-free energy and transportation company. The solar company accepted the offer on Aug. 1.
On the same day, SolarCity said installations rose 6.3 percent to 201 megawatts (MW) in the second quarter ended June 30. It, however, cut its full-year installation forecast for a second time by 100 MW to 900-1,000 MW, citing lower residential bookings in the first half of the year.
SolarCity, known for its innovative no-money-down financing schemes that had spurred a rapid growth in installations, said on Tuesday that the talks with Tesla led to project financing delays of about 30 days.
Several financings expected in June actually closed in July, and while this negatively impacted cash balance at the end of the second quarter, it is expected to have a positive impact at the end of the third quarter, SolarCity said.
The company also reported a smaller-than-expected loss for the quarter as the rise in installations helped revenue surge 80.7 percent to $185.8 million.
Net loss attributable to shareholders more than doubled to $55.5 million, or 56 cents per share, from $22.4 million, or 23 cents per share, as expenses jumped 51 percent.
On an adjusted basis, the company posted a loss of $2.32 per share, while analysts on average were expecting a loss of $2.44 and revenue of $146.08 million, according to Thomson Reuters I/B/E/S.
The company, which has been burning through cash, has come under pressure from rivals offering low-cost solar energy from utility-scale installations, and because some state governments have reined in subsidies that encouraged rooftop solar.
In a bid to stay relevant, SolarCity in May introduced a set of services for utilities, including development of solar power plants, battery storage and other grid planning resources.
However, the company said late last year it would now slow its pace of growth to focus on generating cash.
SolarCity's shares were up 0.2 percent at $24.60 in extended trading on Tuesday. Tesla's stock swap offer had valued SolarCity at $25.37 per share.
Up to Tuesday's close, the stock had gained about 16 percent since Tesla made its offer in June.
(Reporting by Arathy S Nair in Bengaluru; Editing by Savio D'Souza)
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