Sunlight Financial Holdings, a technology-enabled point-of-sale finance company, will be acquired by a consortium of established investors in the solar energy industry, including an affiliate of Greenbacker Capital Management, Sunstone Credit, IGS Ventures and others (collectively, “ED Umbrella Holdings” or “the consortium”), as well as its secured lender, Cross River Bank (CRB), and entered into a restructuring support agreement to reduce its debt burden while strengthening its balance sheet. The agreement also outlines the expected restructuring plan between Sunlight and the restructuring support parties.
“We are excited for Sunlight’s future,” Matt Potere, CEO of Sunlight Financial, said. “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.”
As part of the process, Sunlight Financial has filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code to implement the acquisition. Sunlight Financial will request an expedited in-court process, which will allow the company to quickly exit Chapter 11.
Trade creditors, suppliers and contractors will be paid in the ordinary course of business, and customer relationships will continue uninterrupted. Employees can also expect that operations will continue without interruptions, and they will be paid and provided benefits on the usual schedule.
A summary of terms in the plan is set forth in the restructuring support agreement and addressed in the company’s form 8-K filing. Significant elements of the plan include:
- All channel partners, contractors, installers and trade creditors will be paid in full and continue to be paid in full and on time.
- Loans will continue to be originated and funded in the ordinary course of business through the partnership of the company with CRB; the acquisition will provide substantial additional capacity for such lending.
- The consortium will invest significant new capital into the company.
- Members of the consortium bring substantial operating and financial expertise and will partner with existing management to re-establish the company’s position as the pre-eminent platform for residential solar and home improvement finance solutions.
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Weil, Gotshal & Manges is serving as legal counsel, Guggenheim Securities is serving as investment banker and Alvarez & Marsal is providing financial advisory services to Sunlight Financial. Locke Lord is serving as legal counsel to the consortium. Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal counsel and Piper Sandler is providing financial advisory services to CRB.
