Tag Archives: glbl

SunEdison Ex-Employee Blamed For Bungled Vivint Solar Deal: Audit

SunEdison ‘s ( SUNE ) retained counsel blamed a former employee for the bungled Vivint Solar ( VSLR ) acquisition but noted SunEd’s own top management forged “an overly optimistic culture” related to projected cash flow. The late 2015 audit wrapped up April 4, finding no material misstatements in SunEd’s historical financial statements and no evidence to support fraud or willful misconduct by management, according to an 8-K filed Thursday. In afternoon trading on the stock market today , SunEdison stock flared 64%, but that only took the depressed stock to near 60 cents. As of Wednesday’s close, shares were 98% off their seven-year high above 33 touched on July 20, 2015, achieved after SunEd announced plans to acquire solar installer Vivint. Ex-Worker Cited For Wrongdoing Largely, the auditor blamed a former employee for the failed Vivint Solar deal. SunEdison was slated to buy the residential developer for an initial $2.2 billion price tag. Vivint Solar called off the marriage in March, citing SunEd’s financial stance. “The independent directors also identified wrongdoing by a former non-executive employee of the company in connection with negotiations over the termination of the Vivint Solar acquisition,” according to the filing. SunEdison said it fired the employee when it learned of the wrongdoing. The company acknowledged in an 8-K filing last month that the U.S. Securities and Exchange Commission is investigating it, and that the  Department of Justice has subpoenaed  its Vivint records. The auditor also found problems related to SunEdison’s cash forecasting and liquidity management practices. Those practices may have led SunEd to technically default on $725 million in second-lien loans last month unless its creditors allowed for extensions. Specifically, the auditor said SunEdison’s cash forecasting efforts lacked sufficient controls and processes, and certain assumptions underlying cash forecasts were “overly optimistic,” and “a more fulsome discussion of risks and adjustments” was warranted. Also, SunEd failed to respond appropriately when its forecasts flopped. The auditor recommended SunEdison implement an improved cash forecasting system and provide more transparency to the board regarding cash management practices. Hiring Ilan Daskal to succeed Brian Wuebbels as CFO is also a remedy, the audit found. TerraForm Global Sues SunEdison Wuebbels stepped down in March from his SunEd CFO role but will remain in his TerraForm Global ( GLBL ) and TerraForm Power ( TERP ) CEO positions. Last month, TerraForm Global tried to separate itself from its parent , saying “there is a substantial risk that SunEdison will soon seek bankruptcy protection.” Last week, TerraForm Global filed a claim against SunEdison and its top dogs, asserting breach of fiduciary duty and contract, as well as “unjust enrichment” by SunEdison related to its failure to drop $231 million in India projects to its yieldco. TerraForm Global had already prepaid the money and is now seeking relief. In the same claim, it argued sister yieldco TerraForm Power would be liable for the $231 million if SunEdison files a bankruptcy petition. Both TerraForms are also now out of Nasdaq compliance, having twice delayed their annual 10-K financial filings. TerraForm Power has until May 16, and TerraForm Global until May 31, to submit plans for how they will become compliant. Nasdaq can grant a 180-day extension, allowing both yieldcos until September to regain compliance or risk delisting. TerraForm Global stock was up a fraction Thursday afternoon, but TerraForm Power stock was down 2.5%.

First Solar, SunPower To Withstand SunEdison Inferno: Guggenheim

First Solar ( FSLR ) and SunPower ( SPWR ) stocks flashed Wednesday after a Guggenheim analyst said rival  SunEdison ‘s ( SUNE ) “collapse” wouldn’t torch the duo and their yieldco 8point3 Energy Partners ( CAFD ). Just ahead of the closing bell on the stock market today , SunPower stock was up about 3%, leading First Solar stock which was up about 2%. Shares of 8point3 Energy Partners trailed, up 0.5%, ahead of beleaguered SunEdison stock, down about 7% and trading below 40 cents. Broadly, solar stocks lit up Wednesday. IBD’s 21-company Energy-Solar industry group was up 2% in late-afternoon trading. SunEdison stock has plunged 99% since its 2015 high on July 20, when it announced its plan to acquire Vivint Solar. Residential installer Vivint Solar scrapped the sale in December, citing SunEd’s lagging financials. Last month, SunEdison’s yieldco TerraForm Global ( GLBL ) distanced itself from massive project developer SunEd, which could be headed for a bankruptcy protection filing soon , according to reports. SunEdison may be in technical default on $725 million in second-tier loans unless it negotiated extensions with creditors. ITC Extension A Boon But First Solar and SunPower won’t feel that heat, Guggenheim analyst Sophie Karp wrote in a research report. Karp initiated coverage on First Solar stock with a buy rating, ahead of SunPower and 8point3 Energy Partners stocks, which have neutral ratings. Congress’ extension to the key Investment Tax Credit (ITC), which underpins the U.S. solar industry, will prove a boon for large-scale developers like First Solar and SunPower, she wrote. Residential installers like SolarCity ( SCTY ) and Sunrun ( RUN ) won’t see the same benefits. “We do not think that residential developers will be main beneficiaries due to the fiercely competitive nature of their business,” she wrote. “Despite operating in a fragmented and competitive market (large-scale developers) are still much better protected and will be able to retain more benefits.” But SunPower might be too internationally stretched to reap the ITC extension benefits as fully as First Solar, Karp wrote. Prepping for the expected expiration Dec. 31, 2016, SunPower invested heavily in international expansion. “Given that the ITC extension has changed the calculus domestically, we wonder if SunPower is now too thinly stretched to take advantage of this backdrop,” Karp wrote. Her price target on SunPower stock is a 21. She lists First Solar stock with a 77 price target. SunEdison’s collapse will likely lead First Solar and SunPower to bring their financing back to basics, Karp wrote. Project financing will be available to reputable players at attractive rates, but yieldcos will likely continue to be shut out of the market. Meanwhile, tech innovations are driving solar costs down and storage is on the horizon, Karp wrote. Storage is often seen as a pie-in-the-sky innovation to cut solar customers’ reliance on utilities at night and on cloudy days.

SunEdison Yieldco TerraForm Power Surges On Boosted Appaloosa Stake

David Tepper’s Appaloosa Management boosted its share Friday in SunEdison ( SUNE ) yieldco TerraForm Power ( TERP ) to more than 10%, according to a U.S. Securities and Exchange Commission filing. In afternoon trading on the stock market today , TerraForm Power stock was up 12%, near 10, after touching a two-week high. Shares are down 31% year to date on SunEd-related struggles. Appaloosa now owns roughly 7.8 million shares, or 10.88%, of TerraForm Power stock, vs. its earlier 9.5% stake. Also, British Virgin Islands fund Palomino Master upped its stake to 6.23%, just shy of 5 million shares. The boosted Appaloosa stake followed Tepper’s calls earlier this week to overhaul TerraForm Power’s board, Reuters reported . On Wednesday, CEO of TerraForm Power and its sister company TerraForm Global ( GLBL ) Brian Wuebbels stepped down amid the controversy. TerraForm Power didn’t share its Friday boon with parent company SunEdison. S&P Global Market Intelligence dropped its coverage of SunEdison stock Friday on “a change in investor focus.” The firm last had a hold rating on shares. SunEdison stock was down more than 6% Friday afternoon, near 50 cents, as the company faces a myriad of issues, including a late Thursday 8-K that revealed a U.S. Department of Justice subpoena into its failed Vivint Solar ( VSLR ) deal. The SEC is also investigating SunEdison, the solar developer confirmed. This week, TerraForm Global said in an 8-K that it’s sufficiently liquid to withstand a SunEdison bankruptcy . SunEdison’s financial woes caused all three to miss a Wednesday deadline to file their annual 10-Ks. Unless SunEdison negotiated extensions, it is now in technical default on $725 million in second-lien loans.