But 16 months after Chief Executive Officer Elon Musk kicked up controversy by acquiring the solar-panel installer founded by two of his cousins, its obligations are a strain on Tesla’s finances. The $2bn purchase came with a $2.9bn debt load, and a chunk of that is soon coming due. That’s bad timing for a company churning through about $6,500 a minute and trying to stave off the need for another capital raise.
“SolarCity debt may not be the immediate cause of Tesla’s problems, but it certainly isn’t helping right now,” said Alexander Diaz-Matos, an analyst at credit research firm Covenant Review LLC.
Tesla representatives declined to comment for this story. The solar business generated positive cash flow last year, according to the company.
Debt Coming Due
Tesla’s debt runs the gamut — convertible bonds, promissory notes, term loans, cash-equity debt, asset-backed securities. Most of the total is tied to Tesla the automaker.
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