SunEdison Files for Bankruptcy After Buying Binge

 

THE ASSOCIATED PRESS: One-Time Star in Solar Energy, SunEdison Seeks Protection

SunEdison, a one-time star in the alternative energy field, filed for bankruptcy protection Thursday after years of rapid-fire acquisitions left the solar company in a desperate cash situation. Just last week an audit committee reviewing operations at company, based in Maryland Heights, Missouri, just outside of St. Louis, found an "overly optimistic culture and its tone at the top." The committee also said that at SunEdison, "cash forecasting efforts lack sufficient controls and processes."

"Our decision to initiate a court-supervised restructuring was a difficult but important step to address our immediate liquidity issues," said CEO Ahmad Chatila, in a company release.

SunEdison, which had grown to an almost $10 billion solar energy behemoth by July, had burnished that progression through a series of sizeable acquisitions. After acquiring one company in 2013, the following year it acquired all or portions of nine, then followed in 2015 with another 18 acquisitions or sales.

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BBC: US solar firm SunEdison files for bankruptcy protection

The company had $18bn (£12.6bn) in liabilities on 31 December according topapers it filed with the US bankruptcy court. It said it has secured $300m of new financing to use during the bankruptcy process.

Meanwhile, renewable energy firm Ecotricity said it had bought SunEdison's UK rooftop solar business. Investors have filed legal claims alleging SunEdison misled them about its financial viability. The company has delayed releasing its annual reports twice.

SunEdison is also facing investigations by the US Department of Justice (DoJ) and Securities and Exchange Commission (SEC) over its failed deal to buy Vivint Solar. The $2.2bn cash-and-stock deal fell through in March, after SunEdison failed to close on the acquisition.

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REUTERS: Solar developer SunEdison in bankruptcy as aggressive growth plan unravels

SunEdison's two publicly traded subsidiaries, TerraForm Power Inc (TERP.O) and TerraForm Global Inc (GLBL.O), are not part of the bankruptcy. In a statement, the companies, known as yieldcos, said they had sufficient liquidity to operate and that their assets are not available to satisfy the claims of SunEdison creditors.

The bankruptcy "will present challenges," however, including with financing agreements for certain projects, the yieldcos said.

The Chapter 11 filing caps SunEdison Chief Executive Officer Ahmad Chatila's seven-year quest to transform a struggling maker of silicon wafers into a renewable energy giant able to capitalize on burgeoning demand for solar and wind energy amid growing concerns about climate change.

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BLOOMBERG: SunEdison's Filing Leaves the Renewable Energy Industry Unfazed

“The issue with SunEdison was they tried to grow too fast and took on too much debt,” Andrew de Pass, chief executive officer of Conergy, said in an interview. The developer is majority-owned by Kawa Capital Management Inc., a Miami-based asset management firm that acquired assets of an insolvent German solar company three years ago. Conergy completed almost 500 megawatts of solar plants last year generating revenue of more than $500 million and has “little” debt, he said.

The biggest impact from SunEdison’s bankruptcy could be the potential sales of project assets offered in what’s already become a buyer’s market. Conergy may bid on such assets with a partner, he said.

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