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SunEdison Files For Bankruptcy To ‘Right-Size’ Its Balance Sheet

Beleaguered solar developer SunEdison ( SUNE ) filed for Chapter 11 bankruptcy reorganization early Thursday after securing $300 million in debtor-in-possession financing, the company said in  a press release . The move had been expected. SunEdison stock, which crashed spectacularly in the second half of 2015, was up a fraction in early trading on the stock market today , at 35 cents. SunEd yieldcos — companies created to hold solar assets —  TerraForm Power ( TERP ) and TerraForm Global ( GLBL ) stocks were up a respective 7% and 8%. The SunEdison bankruptcy doesn’t include those yieldcos. SunEd CEO Ahmad Chatila described the Chapter 11 filing as a reorganization that will let SunEd “right-size” its balance sheet and reduce debt. As of Sept. 30 — SunEd’s last financial filing — the company had wracked up $11.7 billion in debt amid a rampant M&A spree that ended with its failed attempt to buy solar installer  Vivint Solar ( VSLR ) for an initial $2.2 billion. “Our decision to initiate a court-supervised restructuring was a difficult but important step to address out immediate liquidity needs,” Chatila said in a statement. Restructuring will allow SunEdison to become a “more streamlined and efficient operator” as it sheds non-core assets and takes advantage of its technological and intellectual assets, Chatila said. Meanwhile, SunEdison will continue ongoing projects and pay for products procured after the Chapter 11 filing. Employees will still receive a wage and benefits. SunEdison representatives wouldn’t comment on media inquiries, instead directing reporters to the company’s new restructuring website .

Einhorn Trims SunEdison Stake On Bankruptcy Rumors; Yieldco Sued

Activist investor David Einhorn cut his SunEdison ( SUNE ) stake by more than half, dropping below a critical 5% threshold, according to a late Monday filing that followed fresh reports of a looming SunEd bankruptcy. On Friday, Einhorn trimmed his SunEdison shares to 2.8% from 6.8% in January, meaning he is no longer a beneficial owner required to file a U.S. Securities and Exchange Commission filing when he sells or acquires shares. Einhorn-owned hedge fund Greenlight Capital also cut its SunEdison exposure to 1.6% from 4% in January. Three months ago, SunEd gave in to Greenlight demands, allowing former Greenlight executive Claire Gogel to have a role as independent director on the board. Together, Einhorn and Greenlight own just shy of 18 million shares of SunEdison stock. In early trading on the stock market today , SunEdison stock dropped nearly 5% and was trading below 33 cents. Shares of yieldcos TerraForm Power ( TERP ) and TerraForm Global ( GLBL ), on the other hand, rose 2.1% and 0.4%, respectively. SunEdison stock is down 99% since last July, when it hit a seven-year high before announcing its plan to acquire residential installer Vivint Solar ( VSLR ). In December, amid increasing reports of SunEd’s financial troubles, Vivint scrapped the sale. TerraForm Power stock climbed Tuesday despite a new  class action lawsuit  filed by New York law firm Bronstein, Gewirtz & Grossman, with the plaintiffs consisting of shareholders who bought stock between May 7, 2015, and March 15. According to the complaint, “the defendants made materially false and misleading statements regarding the TerraForm’s business, operational and compliance policies.” On March 16, TerraForm Power missed a second deadline to file its annual 10-K. SunEdison and TerraForm Global also missed their 10-K deadlines. Both TerraForms now face the potential of being delisted from the Nasdaq.

SunEdison Chapter 11 Looms After Bankruptcy Loan Talks Confirmed

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.