Solar-energy company SunEdison Inc. plans to file for bankruptcy protection in coming weeks, a dramatic about-face for a company whose market value stood at nearly $10 billion in July, the Wall Street Journal reported on Saturday. The company is preparing a chapter 11 filing and is in talks with two creditor groups to obtain a loan to fund its operations during the process. Creditors are likely to take control of the company and its portfolio of power projects. SunEdison, whose stock has plunged in recent months, would rank among the largest financial collapses in recent years. The company, based about 20 miles outside St. Louis, used a combination of financial engineering and cheap debt to grow into one of the country’s biggest developers of renewable-power plants. But a proposed $1.9 billion takeover of residential-rooftop installer Vivint Solar Inc., which was terminated last month, was unpopular with investors. Meanwhile, falling oil prices caused a broad selloff for energy stocks, and capital-market turbulence stoked concerns about SunEdison’s ability to continue financing acquisitions. Read more. (Subscription required.)
In related news, businesses ranging from Silicon Valley venture capitalists to a small Massachusetts solar installer say they are owed money by SunEdison Inc., underscoring the breadth of a breakneck expansion seen contributing to the solar and wind energy company's financial woes, Reuters reported today. Two dozen legal claims have been made since the beginning of the year against SunEdison and its executives, mainly from shareholders who claim the company misled them about its financial position, a review of cases on Westlaw showed. None of the lawsuits reviewed have yet been adjudicated, nor have the claims been validated. Most are too recent for SunEdison to have filed a response to, and the company did not respond to requests for comment. SunEdison also faces a major lawsuit from solar installer Vivint Solar Inc. for failing to complete its $1.9 billion acquisition of the company. In its annual filing in March last year it disclosed only two significant lawsuits. Read more.
