Clean Power

Published on March 30th, 2016 | by Joshua S Hill

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SunEdison In More Hot Water As SEC Investigation Begins & Bankruptcy Looms

March 30th, 2016 by  

Once the world’s leading renewable energy developer, SunEdison’s fortunes have fallen like a rock, tied to a much larger rock, and are now facing the looming threat of bankruptcy.

SunEdison Logo (PRNewsFoto/SunEdison, Inc.)SunEdison’s woes have already been well covered — from its numerous failing transactions, to missing its Q4 & 2015 filing deadline, to news of debt restructuring. This week, however, it’s only gotten worse, as the US Securities and Exchange Commission (SEC) has begun its own investigation into the company’s disclosures to investors about its liquidity. To make matters more complicated, SunEdison’s second yieldco, TerraForm Global, intended to deal solely with emerging markets, filed a report with the SEC warning of “a substantial risk that SunEdison will soon seek bankruptcy protection.”

News of the possibility that SunEdison had in some way misled its shareholders is not new — late in 2015 the Audit Committee initiated an investigation based on allegations made by former executives of the company concerning “the accuracy of the Company’s anticipated financial position.” However, according to The Wall Street Journal, officials in the SEC’s enforcement unit have apparently begun investigating SunEdison’s disclosures to investors, looking into whether the company overstated its liquidity last year when the company announced that it had $1 billion in cash.

TerraForm Global, Inc. Logo (PRNewsFoto/SunEdison, Inc.)This news was paired with a separate SEC filing made by TerraForm Global on Tuesday, advising “that the filing of their Annual Report on Form 10-K for the fiscal year ended December 31, 2015 will be delayed” beyond the deadline. This is due in large part to the fact that TerraForm Global relies on SunEdison’s own same-filings to be made to appropriately determine their own financial status, but according to the filing:

“SunEdison has not performed as obligated under the Management Services Agreement, in particular with respect to financial reporting and control matters.  Additionally, SunEdison has not or may not be able to perform under other agreements, including agreements with respect to the pending contribution of the projects in Uruguay and India, which were part of TerraForm Global’s IPO portfolio, and the pending dropdown of the additional India project portfolio aggregating 425 MW purchased by TerraForm Global, LLC (“Global LLC”) in the fourth quarter of 2015.”

Furthermore, TerraForm Global stated outright in its filing that, “due to SunEdison’s liquidity difficulties, there is a substantial risk that SunEdison will soon seek bankruptcy protection.”

Such a move would have a massive impact on TerraForm Global (not to mention the company’s other yieldco, TerraForm Power), however the company is still confident that, in the event SunEdison seeks bankruptcy protection, “TerraForm Global will have sufficient liquidity to support its ongoing operations.”

Unsurprisingly, TerraForm Global’s shares plummeted 19% in the wake of the company’s SEC filing.


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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.



  • phineasjw

    This may be emblematic of nothing, but when I filled out the Project Sunroof form and began receiving phone calls from various solar companies, the ONLY company that would call but never leave a message was SunEdison.

    They called over and over, with no caller ID and left no message. This was literally the first time I’ve had a company looking for my business that wouldn’t leave a message. The other, local solar companies made personal calls and ultimately, personal visits to my house.

    Finally, seeing the same number repeatedly, I looked it up online and found that it was SunEdison. In speaking with them, I could tell the representative was in a large call center (loud/noisy), and was looking to push leasing options, even though on Sunroof I checked off the fact I wasn’t interested in a lease.

    After telling them I wasn’t interested, in a couple of weeks, they began calling again (from the same number) and again leaving no message. Ultimately I had to block their number.

    The whole interaction left me feeling that they were completely clueless and so large that they had become disconnected to what people actually wanted.

    In short, maybe the anecdote means nothing, but after that experience I’m not surprised to that the company isn’t doing well financially.

  • JamesWimberley

    If the yieldcos survive the bankruptcy of the parent developer, that will in fact provide a strong endorsement of the model. Its underlying idea is sound: developing utility solar projects is medium risky, operating existing solar farms is as safe as a business gets.

  • neroden

    I don’t think they were ever the country’s leading renewable energy developer. One of the top five, but never the top one.

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