SunEdison Inc (OTCMKTS:SUNEQ) won’t tell shareholders any lies. The bankrupt solar firm revealed in new court papers that investors will not recover anything from its Chapter 11 case. Because they won’t get anything back, they should be stopped by a judge.
SunEdison Inc to Shareholders: You Won’t Get Anything
In April, SunEdison filed for Chapter 11 bankruptcy. Since then, shareholders have been trying to recover something from the Chapter 11 case. This is wrong, says the solar firm.
Court papers revealed Thursday show that it wants a judge to deny investors’ efforts to set up a committee to represent them. By doing this, the shareholders feel they can get something back. But will it happen?
“Simply put, there is no basis to conclude that there will be any recovery – let alone a ‘meaningful’ one – for equity holders,” the company stated in court papers.
The firm added that it’s “entirely unlikely” it will pay off its debts.
“There is nothing the Debtors desire more than to be able to pay all creditors and return value to equity holders,” SunEdison wrote in documents. “Unfortunately, the facts of this situation lead to the inevitable conclusion that this is entirely unlikely.”
For weeks now, SunEdison shareholders have been trying to inch their way to the bargaining table. Presently, it remains unclear as to what the judge will do exactly with the investors.
The bankruptcy court held an official hearing on Jun. 7 to decide if an Equity Committee would be granted.
Investigators are now probing into its financial health, cash management and accounting practices. The company’s stock fell 99 percent after it took on too much debt, expanded too quickly and nabbed many assets. It has more than $16 billion in liabilities with roughly $20 billion in assets. These assets are being sold off one by one.
SunEdison Inc Liquidating Its Assets
In order to start paying back creditors, SunEdison is trying to raise capital by selling off its assets. The firm has assets everywhere, from Hawaii to India. These facilities could fetch a few billion dollars in the coming months.
Rothschild is the restructuring agent in charge. It has started to take bids to sell geographic bundles of its assets. The solar firm has yet to entirely sign off on the move, but it may have no other choice in its Chapter 11 case.
SunEdison has at least four gigawatts of development and operating assets. The latest reports note that it is nearing deals with firms in India and Hawaii.
Last month, the solar firm garnered $300 million in new debtor-in-possession (DIP) financing from first and second lien lenders. These funds will help keep things functional throughout the restructuring initiative.
SunEdison is now a penny stock. Investors may bet that it’ll turn things around in the coming years.