U.S. renewable energy developer SunEdison saw its stock price fall 20% as it lurched closer to bankruptcy earlier this week, after debt restructuring negotiations reported on Debtwire indicated the company is effectively out of cash.
SunEdison delayed releasing its 2015 annual report March 16 and its YieldCo, TerraForm Power, has also delayed year-end filings, Greentech Media reports. At least one analyst said multiple lawsuits accumulating against the company will be best addressed in bankruptcy court. Fortune warned Tuesday that the Belmont, CA-based company had a week to file the report, after which it will have to begin negotiations with creditors over US$1.4 billion in debt.
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In “a spike fueled in part by an international shopping spree for clean energy projects and developers,” the magazine noted, “the company’s debt ballooned to $11.67 billion in the third quarter of last year from $7 billion in the last quarter of 2014, according to its most recent earnings report.”
“We are witnessing the end, or perhaps the remaking, of SunEdison, briefly the world’s largest renewables developer—and now the destroyer of $10 billion in market value,” comments Greentech’s Eric Wesoff. “When SunEdison’s stock was at its peak, the company raised debt rather than equity, and that debt load has returned with a vengeance.”
He adds that “it takes a very special type of ineptitude to fail on such a massive scale in what is, by most metrics, a healthy, capital-rich, high-growth renewables market. Other comparable vertically-integrated solar companies with YieldCos such as First Solar and SunPower have managed their capital, acquisitions, and personnel in a much more well-paced and judicious fashion. It’s evident in their steady growth, global pipeline, and more-than-occasional profits.”
