SunEdison confirmed Friday that it is trying to negotiate debtor-in-possession financing, an option for troubled firms trying to reorganize their debt under U.S. bankruptcy law or maintain operations until they can be sold as a going concern.
“The filing signaled the potential end to SunEdison’s ambition to become the world’s leading renewable energy development company,” the New York Times reports. “In the end, SunEdison’s fall offers a cautionary tale on the dangers of trying to grow in too many directions at once, analysts said.”
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Restructuring talks are “still ongoing, and there can be no assurance that any agreement will be reached,” SunEdison said in a regulatory filing. The filing indicated that “the company was running out of cash and would need a US$310-million loan to make it through the bankruptcy process,” the Times notes. “It has already reduced staff 40% from October 2015 levels, a reduction it plans to push to 50%.”
The company’s “precarious situation was hardly a surprise,” writes the Times’ Diane Cardwell. “It was once a Wall Street darling, but its stock price began plummeting last summer as investors lost confidence in the industry and criticized its decision to move into the residential rooftop solar business.”
The upshot: “They got ahead of themselves,” said clean energy investor Walter Nasdeo, managing director at Ardour Asset Management. “It’s a mess.”
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