SunEdison at 'substantial risk' of bankruptcy

Mar 29, 2016, 3:18 PM EDT
Solar panel installation.
(Source: ENERGY.GOV/flickr)

SunEdison is at "substantial risk" of bankruptcy as the SEC investigates its shady accounting practices.

USA Today reports:

SunEdison faces a "substantial risk" of bankruptcy, according to a U.S. Securities and Exchange Commission filing by subsidiary TerraForm Global. The warning comes about two weeks after SunEdison delayed its annual report following concerns that the company had misreported certain aspects of its financial performance. Additional signs of trouble emerged in early March when the ailing company's proposed acquisition of rooftop solar company Vivint collapsed when SunEdison couldn't line up the financing necessary to complete the deal. SunEdison shares (SUNE) plummeted 41% in pre-market trading to 74 cents. A SunEdison spokesman declined to comment.

The Wall Street Journal writes:

The Securities and Exchange Commission is investigating SunEdison Inc.’s disclosures to investors about how much cash the solar-power company had on hand as its stock price collapsed last year, according to people familiar with the matter. Officials in the SEC’s enforcement unit are looking into whether SunEdison overstated its liquidity last fall when it told investors it had more than $1 billion in cash, the people said. At the time, SunEdison shares had fallen about 75% since midsummer. The slide has continued, with shares down 96% from a July high, and the company is working with advisers on a potential bankruptcy filing, according to people familiar with the matter. The company’s market value has fallen to around $400 million from nearly $10 billion in July.

Reuters notes:

Vivint Solar Inc (VSLR.N) scrapped a deal to be bought by SunEdison this month, citing concerns about SunEdison's finances. SunEdison had debt of $11.67 billion as of Sept. 30. Excluding its yieldcos, the company had $7.9 billion of debt, and cash and cash equivalents of $1.3 billion. "At this point, SunEdison has really kinda run out of options," S&P Global Intelligence analyst Angelo Zino told Reuters. Raymond James analyst Pavel Molchanov said TerraForm Power and TerraForm Global were legally separate companies and would not follow SunEdison into bankruptcy.