Scalper1 News
SunEdison ( SUNE ) acknowledged Friday it’s in debtor-in-possession talks with creditors and will need a $310 million loan to dig through a potential bankruptcy. That sent shares plunging, extending losses in late trading after Reuters reported that an actual bankruptcy filing could occur as soon as Sunday. SunEdison stock dived 36.7% to about 37 cents on the stock market today , dropping to 29 cents late Friday on the Reuters report . The company’s first- and second-lien loan holders entered into confidentiality agreements March 17, a day after SunEd missed the second deadline to file its annual 10-K paperwork. But “the negotiations with respect to such potential financing transactions are still ongoing,” SunEdison cautioned in an 8-K filing. “There can be no assurance that any agreement will be reached.” Debtor-in-possession negotiations are often a precursor to a bankruptcy filing. SunEd yieldcos TerraForm Power ( TERP ) and TerraForm Global ( GLBL ) have separately warned of “substantial risk” that SunEd might seek bankruptcy protection. TerraForm Power and TerraForm Global on Friday hired AlixPartners as a financial adviser, Bloomberg reported, citing sources. As of Sept. 30, SunEdison had wracked up $11.7 billion in debt. In the March 17 presentation — furnished Friday alongside the 8-K — SunEdison said it planned to focus on core North America, India and Latin America regions, while maintaining growth regions on “hot idle” stance until liquidity improves. SunEd aims to monetize its residential and smaller commercial (RSC) unit and reduce operational expenses to below $400 million. The now-failed Vivint Solar ( VSLR ) acquisition was originally intended to be melded into SunEd’s RSC business. In Q1, SunEdison said it plans to use $779 million in cash, with $481 million spent on projects. As of April 2, SunEdison had 3.7 gigawatts in project investments expected to generate $897 million in proceeds. But it still needs $272 million in future project investments to reach that value. Since October, SunEdison has cut its workforce by 40%, and it is angling for a total 50% reduction, along with a $150 million cut from additional non-labor savings. The firm also completely exited Japan. SunEdison stock had soared 58% on Thursday, when the company released an SEC filing disclosing an audit that showed no evidence of fraud by SunEd executives. But the auditor found wrongdoing by a former non-executive employee involved in the bungled Vivint Solar acquisition talks and an “ overly optimistic culture ” related to projected cash flow. SunEdison noted it terminated the employee upon discovery of the wrongdoing. TerraForm Power fell 7.3% to 9 on Friday. TerraForm Global slid 3.1% to 2.48. Both yieldcos drifted lower late on the Reuters report of a possible Sunday bankruptcy filing by their parent company. Scalper1 News
Scalper1 News