Sunlight Financial (OTCMKTS:SUNL) stock is falling on Wednesday after the solar power financing company and its subsidiaries filed for Chapter 11 bankruptcy.
To go along with this bankruptcy filing, Sunlight Financial also notes that it has found a buyer. A group of investors in the energy sector are acquiring the company as part of the bankruptcy process.
With the bankruptcy process, the company will undergo a restructuring process that will reduce operating costs while lowering its debt. Doing so will give the investors purchasing the company a stronger balance sheet to work with and won’t result in a halt to normal operations.
Matt Potere, CEO of Sunlight Financial, said the following about the deal and bankruptcy in a statement obtained by Solar Power World:
“Our agreement and transaction with our current partners and the Consortium is a strong vote of confidence in Sunlight’s platform and the company’s growth prospects. Sunlight will emerge from this process in a stronger position, with the resources to invest in our platform and our people, both in service of our partners.”
What Led to the Sunlight Financial Bankruptcy?
Sunlight Financial’s financial problems came about after the Federal Reserve started increasing interest rates to combat inflation. That chipped away at the company’s balance sheet until it needed to seek out alternatives to its current setup.
Sunlight got into this predicament by offering low-interest loans before those rate hikes went into effect. That left it stuck with losses after the hikes, which also resulted in less demand for its solar power loans.
SUNL stock is down 34.2% as of Wednesday morning.
Investors looking for more of the most recent stock market stories will want to keep reading!
We’ve got all of the hottest stock market news worth reading about on Wednesday! A few examples include a new deal for Palantir (NYSE:PLTR), what’s going on with Chinese electric vehicle (EV) stocks and what has stocks up today. All of that info is ready to go at the links below!
More Stock Market News for Wednesday
- PLTR Stock: Palantir Announces New Partnership With CalypsoAI
- Chinese EV Stocks Nio, Li, Xpeng Report October Deliveries
- Why Are Stocks Up Today?
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
