Solar company SunEdison announced on 21 April that together with certain of its domestic and international subsidiaries it has filed voluntary petitions for reorganisation under Chapter 11. Its publically-traded yieldcos, TerraForm Power and TerraForm Global are not part of the filing.
"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" said Ahmad Chatila, SunEdison chief executive officer. The company has secured commitments for new capital totalling up to $300 million in debtor-in-possession financing from a consortium of first and second lien lenders. Subject to Court approval, these financial resources will be made available to the Company to support its continuing business operations
Business analysts Bloomberg commented that the filing follows a two-year, $3.1 billion acquisition "binge" that "drove its debt to unmanageable levels and sent investors running for the exits".
"SunEdison's bankruptcy says more about the company's strategic decisions than about the solar industry as a whole" it said. "Comparable companies SunPower and First Solar have managed a develop-and-sell business profitably over the past three years. What has distinguished SunEdison has been the relentless ... pursuit of growth, in which it has invested vast amounts of borrowed money. Not all of its ventures succeeded, which is inevitable in the project development business, but SunEdison's win to loss ratio was evidently insufficient. It borrowed a lot of money and lost it - or at least tied it up in projects at various degrees of completion, which it needs to sell to realise the gains and pay back creditors. On the eve of the bankruptcy filing, these projects were for sale.' However "there is plenty of value in the project pipeline, which ultimately comprises cash-generating assets not linked to the continued existence of SunEdison."
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