Clean Power SunEdison Logo (PRNewsFoto/SunEdison, Inc.)

Published on March 23rd, 2016 | by Joshua S Hill

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SunEdison Shares Tank Further After News Of Debt Restructuring Leaks

March 23rd, 2016 by  

News that SunEdison is in talks with holders of its second-lien loans to fund a debtor-in-possession financing facility has spooked investors, causing the company’s shares to tank 25% by days’ end.

SunEdison Logo (PRNewsFoto/SunEdison, Inc.)We have already covered news of SunEdison’s dramatic downward trend over the past 9 months, which has culminated in SunEdison (and its first yieldco, TerraForm Power) settling with Latin America Power for $28.5 million over the termination of a planned acquisition; Vivint Solar terminating its acquisition agreement with SunEdison due to “SunEdison’s failure to meet its obligations under the merger agreement” and then filing “action in the Court of Chancery of the State of Delaware suing SunEdison, Inc. over its willful breach of the merger agreement between Vivint Solar and SunEdison.”

A few days later SunEdison announced that it had missed the deadline to file its Q4’15 and 2015 financial reports due to an ongoing investigation and IT errors, and just this week TerraForm Global, SunEdison’s second yieldco, dedicated to emerging markets, announced that it was cancelling a 326 MW deal in Central America.

So it really should come as no surprise that investors reacted negatively to today’s leaked news that the company is in negotiations with holders of its second-lien loans to fund a debtor-in-possession (DIP) facility. This is according to Debtwire, by way of “two sources familiar with the matter.” The news was published on Tuesday, and by looking at the company’s shares, you can also see exactly when the news was leaked.

SunEdison-6

“DIP negotiation means that the company has effectively run out of cash and they get to pay their creditors ‘fair market value’ for the secured assets versus the contracted value,” Axiom Capital analyst Gordon Johnson told Reuters.

The Motley Fool raises the next natural concern, that “SunEdison is veering closer to bankruptcy by the day.” With its financial statements for the fourth quarter and full-year 2015 still absent, and this latest news which suggests the company is even closer to being out of cash, it really feels as if it is only a matter of time before what was once the world’s leading and preeminent renewable energy developers has to file for bankruptcy.


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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • Adrian

    SunEdison bought First Wind early this year. At the auction, somone is going to make a mint buying up the windfarms that have generous 20-year PPAs in place – some have over 15 years remaining on the agreements.

    Somehow I doubt ratepayers will see any benefit…

  • Jack Wolf

    I see oily hands on this mess. Yes, they have issues, but the way the story was pounded by some, and repeated again and again by others, told me something. Then when news sources started using the exact same headlines and arguments for Solar City, well, that’s all I needed to know. (And see the recent War on Solar article in Rolling Stone) I’m holding cause in an abruptly changing climate when countries refuse to address the cause, we cant afford to lose even one renewable energy company, especially the biggest.

  • Mike333

    Never listen to dumba** Jeeter, “MIT management”.

  • Mike333

    Lesson: NEVER Let a Hedge Fund Manager get an ownership share of a company.

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