SolarCity announced Monday the company managed to raise $345 million, even as its business model comes under scrutiny following news of a possible merger with electric vehicle maker Tesla Motors.
The money, financed by four firms in June and July, will go toward covering the cost associated with upkeep on new infrastructure and solar panel installation
SolarCity also added $110 million and new lenders to its credit accounts, which stands at $760 million. The new lenders and added debt could potentially allow the company to expand its renewable energy credit line to accept hedge fund facilities in hopes of drawing more capital from the accounts.
The additional funding comes on the heels of rough stretch for SolarCity, as the company continues to get flack over a proposed merger with Tesla.
Techno-wonder boy Elon Musk proposed fusing Tesla and the solar panel company in June, both of which are headed by Musk, prompting critics to wonder if such a move is even ethical.
Critics and shareholders of Tesla argue the fusion has all the earmarks of being a family affair.
Musk’s cousin, Lyndon Rive, is SolarCity’s chief executive officer – Rive, who told reporters he would also be recusing himself from the “decision-making process,” said the offer represented a value of between $26.50 and $28.50 a share. “Ultimately, the shareholders will decide,” he added.
Kimbal Musk, Elon Musk’s brother, a director on the Tesla Motors Board of Directors, has yet to recuse himself from the voting process, despite the long history he and his brother have building Internet-based companies.
CtW Investor Group, which holds 200,000 shares of Tesla, said in June that the market’s “hostile reaction” to the SolarCity deal was due in part to the realization that that Donald Kendall, chief executive of investment management firm Kenmont, is the only person on the SolarCity board without deep-rooted ties to Musk.
“This is particularly questionable when six out of our seven board members have ties to SolarCity,” a CtW 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 solar panel industry is heavily subsidized, with companies like SolarCity and its competitors benefitting from 30 percent federal tax credit for home solar panels.
States like Florida currently ban the outright purchase of solar panels — instead, customers must lease the panels from utility companies and sell any excess energy back to the utilities at higher than market rates, causing energy prices to pitch upward for utility customers without solar panels.
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