SunEdison Inc (SUNE) to Begin ‘Re-Engineering’ Business Model by Cutting 220 Jobs

SunEdison Inc (NYSE:SUNE)

SunEdison Inc (NYSE:SUNE) saw its stock crash another 10 percent Thursday after the solar energy firm announced a corporate restructuring. SunEdison said it will cut jobs, close down plants and sell assets as it will “re-engineer” its business model in 2016.

SunEdison Maintains Nightmare Stock Status

The solar firm said Thursday it’s closing down one production facility in Texas, selling a plant in Malaysia and refocusing its Oregon facility on research, training, development and tech demos. This has resulted in the loss of 220 jobs, including 180 jobs in Texas and 40 jobs in Oregon.

SunEdison Inc (NYSE:SUNE)

SunEdison’s sale of its Malaysian wafering facility to Xi’an LONGI Silicon Materials Corp, a Chinese solar panel maker. It will come with a price-tag of $63 million. It’s also reported that $18 million will be paid once requirements are met.

It’s been noted that the firm signed a deal to purchase three gigawatts of high-efficiency panels from LONGI over the next several years.

In the last 12 months, SunEdison has been moving away from Asia. The firm sold its Japanese division to Bangchack, a Thailand-based oil and gas business.

Ahmad Chatila, SunEdison chief executive, said that it’s pushing ahead with its asset-light strategy. He noted that the move to “re-engineer” the business will boost value, which will help achieve its long-term growth plans.

Due to these changes, the firm projects to report a total of $266 million in non-cash impairment charges and another $171 million in other restructuring fees in its fourth quarter earnings report. It does expect to post as much as $13 million in other charges in fiscal 2016.

SunEdison’s Hawaii Trouble

SunEdison’s attempt at cleaning its balance sheet smacked into a wall.

Hawaiian Electric Co. (HECO) canceled its price purchase agreement (PPA) with SunEdison for solar power because it’s too far behind on projects. The solar farms include a 65-megawatt Kawailoa solar farm, the 64-megawatt Waipio plant. and the 19-megawatt Milani II facility.

Construction on these projects started last fall. They will now be transferred over to creditors when they’re finished.

A media rep for HECO, Darren Pai, said in a statement Wednesday that the firm had missed many deadlines throughout the process. One of them was failing to secure proper financing to finish a project.

He added that the firm has received notice for the past month that it has been mulling over canceling the contract.

“In the end it had to make a decision that it believes is in the best interest of its customers and that allows it the best opportunity to use this renewable energy capacity for viable projects.”

A SunEdison official said it’s fighting the decision.

Credit Suisse analyst Patrick Jobin told Bloomberg News that the loss of contracts could hurt future plans to secure contracts or transfer plants.

The firm’s shares have slumped 70 percent year-to-date. In the last 12 months, it’s dropped 93 percent to $1.50.  This is a major plunge from when it was trading at $30 a share in 2015.

It’s also facing legal trouble from investors, employees and a hedge fund.

SunEdison has come under pressure from shareholders to pay down debt and keep cash in order to acquire the $1.9 billion deal of Vivint Solar Inc (NYSE:VSLR), a solar rooftop maker.

Can SunEdison return to the top? Maybe not anytime soon. Analysts are worried because the firm missed a payment dividend announcement. If that’s not cause for concern then what is?

Right now, SunEdison can only be saved in California, where it’s nabbed quite a few deals.

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