SunEdison Inc (NYSE:SUNE) crashed another 50 percent Monday to 20 cents. The solar firm has seen its shares approach evisceration as its bankruptcy remains imminent. Despite some of the good news, no matter how small, investors are fleeing on the premise of too little too late.
SunEdison Inc – a Case of Debt, Bankruptcy, Nothingness
SunEdison started off the week by plunging another 50 percent. By midday Monday, the firm’s shares collapsed 53 percent to 20 cents, and it’s plausible that it’ll continue the downward trend for the rest of the week. With the bad news outweighing the bad, the declines will remain.
The first bad news came Sunday when one of its yieldcos filed a lawsuit. TerraForm Global Inc (NASDAQ:GLBL) accused its parent company of diverting funds to “misappropriate” TerraForm’s assets. The yieldco is seeking $231 million in cash, which the yieldco says SunEdison used to “prop up its flagging liquidity position.” Some of the names listed include SunEdison Chief Executive Ahmad Chatila, General Counsel Martin Truong and Brian Wuebbels. These men, the lawsuit says, violated their fiduciary duty.
The second bought of bad news came when it was discovered by the Wall Street Journal that the solar firm is getting ready to file for Chapter 11 bankruptcy protection in the coming weeks. By filing for protection, creditors will likely take control of the firm and its various solar power projects.
The third piece of bad news came when it was reported the solar firm was going to be selling its projects in India. Facing a liquidity crisis and a bankruptcy, SunEdison has put all of its India assets on the chopping block. It’s unclear as to how much the firm can raise from this sale.
Some Good News for SunEdison Inc?
Despite the plethora of bad news, there was some good this week.
SunEdison may raise a nice sum of money after it was reported India’s Adani Group may buy the local assets of the solar firm. With many solar plants in India, the Adani Group may purchase several solar plants and help the country from avoiding constant power outages.
Adani has not publicly commented on the reports. But if the sources are correct then it would show that some of SunEdison’s projects still hold some value.
It was also reported that SunEdison’s two yieldcos, TerraForm Global and TerraForm Power Inc (NASDAQ:TERP), will not be filing for bankruptcy protection. Although it suggests strong financial footing, shares of the two firms are down six and two percent, respectively.
In the last 12 months, the firm’s shares have cratered 99.1 percent. It’s a sad story for the once promising clean energy firm. Investors were quite high on the firm, particularly when it was trading as high as $30 just last summer. It expanded too much too fast and took on a lot of debt. With low oil prices and inept leadership, SunEdison’s collapse can prove as a cautionary tale.