Courtesy of Benzinga.
On Sunday, Bronte Capital published an e-mail exchange between itself and the investor relations department for Trina Solar (NYSE: TSL).
In its original e-mail, Bronte Capital raised questions regarding the company’s cash balance and its seemingly bizarre debt covenants.
Bronte Capital writes, “This facility is designated solely for the expansion of our production capacity, with the remaining to be used to supplement working capital requirements once the capacity expansion is completed…Trina has drawn this facility far in excess of what is allowed under the facility terms and is currently in breech of its debt covenants…this is peculiar because Trina showed free cash in excess of $750 million on their balance sheet.”
Trina Solar responded to Bronte Capital’s questions in a subsequent e-mail, but Bronte was not pacified by the response.
Stone Street Advisors followed Bronte Capital, commenting on Trina Solar’s response to Bronte’s inquiry.
Stone Street Advisors writes, “Trina claims in its regulatory filings and in its response to [Bronte Capital] that under the credit agreement, they are required to match funds utilized from the credit facility with funds from other sources…the problem is I couldn’t find any such language in the credit agreement.”
Trina Solar is currently trading near $13.73, down over 8% on the session.
