SunEdison Inc’s (NYSE:SUNE) bad news just keeps piling up. It’s been reported that the clean energy firm could see its solar energy farm in Hawaii get the boot after it failed to reach a milestone, public documents show.
SunEdison’s Trouble in Hawaii
The clean energy firm said last year it was planning to build a 50-megawatt solar energy farm in Hawaii. After a stern warning from Hawaiian Electric Co (HECO), the project may be scrapped altogether.
HECO signed a power purchase agreement (PPA) on a solar farm that would have been built on Oahu’s North Shore. But the firm said that the deal may be nixed if SunEdison fails to provide proof of getting financing for the project.
Shelee Kimura, HECO VP of corporate planning and business development, wrote that SunEdison failed to meet an important funding milestone. This allows “an immediate right to terminate” the contract for the 49MW Kawailoa Solar project.
The publicly released letter outlines terms of the PPA with SunEdison. It includes a $50 per KW charge in the event of termination. This would place the maximum cost of the charge at $2.45 million as well as the impact on the company for losing the contract.
This would be terrible timing for the firm. Its troubles have been well documented this year.
SunEdison hasn’t responded to the letter.
SunEdison’s Recent Moves
This comes as the green energy firm noted that it’s selling three major solar farms in Hawaii worth about $350 million. The purpose is to help wipe out its $336 million worth of debt. It would be sold to D.E. Shaw Group, Madison Dearborn Capital Partners IV LP and Northwestern University.
It was further reported that Bangchak, a Thailand-based oil and energy firm, was buying SunEdison’s Japanese solar division. The deal is valued at $82 million. Bangchak wants to grow its clean energy business.
Japan has been a huge market for SunEdison. The country has turned to solar power since the Fukushima crisis. Solar now powers 10 percent of its homes during peak times.
Despite its troubles, it was noted it funded 146 MW of solar power projects in Andhra Pradesh, Tamil Nadu and Telangana. The energy created from these solar power plants would be sold to nearby distribution centers and private firms.
Pashupathy Gopal, president of SunEdison India, said the firm is helping India meet its goal of installing 175 GW of renewable energy by 2022.
Legal, Financial Woes at SunEdison
In 2015, SunEdison shares were riding a wave of momentum. The firm was buying up solar panel installers, battery solar startups and wind firms. However, it may have to part with many of these ventures because of its swelling balance sheets, debt concerns and a plummeting stock.
Year-to-date, SunEdison shares have cratered more than 53 percent to under $3. This is a far cry from last year when it was trading above $20.
The firm has also been slapped with lawsuits this year. SunEdison is facing a securities class action lawsuit and a lawsuit from Appaloosa Management LP. The former is in regards to its lack of funds to cover its dividends. The other legal matter is about its yieldco buying assets from another solar energy firm.
During Monday’s trading session, SunEdison shares were down more than 11 percent at $2.38.