Struggling renewable energy firm SunEdison has filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Southern District of New York, according to an SEC filing.
SunEdison noted that it had secured US$300 million in debtor-in-possession (DIP) financing from a consortium of first and second lien lenders, close to the maximum figure disclosed in recent filings that would enable the company to continue building and operating renewable energy projects close to previous plans and generate a much as possible from existing project pipelines.
Ahmad Chatila, SunEdison chief executive officer said, “Our decision to initiate a court-supervised restructuring was a difficult but important step to address our immediate liquidity issues. The court process will allow us to right-size our balance sheet and reduce our debt, providing the opportunity to support the business going forward while focusing on our core strengths. It also will facilitate our continued work towards transforming the Company into a more streamlined and efficient operator, shedding non-core assets as well as taking other steps to help us get the most value out of our technological and intellectual property. As a result of this process, we expect that SunEdison will be in an even better position over the long term to utilize our capabilities in the renewable energy sector in service of our customers, business partners, and employees.”
SunEdison's publicly-traded yieldcos, TerraForm Power (NASDAQ: TERP) and TerraForm Global (NASDAQ: GLBL), are not part of the filing.
As a result of the bankruptcy filing, SunEdison’s shares traded on the NYSE are expected to be halted and subsequently de-listed, while its overdue fourth quarter 2015 and full-year financial results are now highly unlikely to be released.
A statement by Dan Whitten, Vice President of Communications for the Solar Energy Industries Association on the bankruptcy filing by SunEdison notes the lack of impact to the overall market demand for solar.
“This is a highly competitive industry with a massive upside. As with other rapidly growing and successful industries, not every company in the solar market is going to stand the test of time. SunEdison is just one company and today's development does not reflect a trend of the broader industry. The solar industry is growing at warp speed. It took us 40 years to get to 1 million installations (which we have just done) and it will take us just two more years to hit 2 million and that, I think, illustrates the direction of the solar industry,” noted Whitten.