SunEdison Inc on Thursday filed for Chapter 11 bankruptcy protection after a short-lived but aggressive binge of debt-fueled acquisitions proved unsustainable.
In its bankruptcy filing, the company, once the fastest-growing US renewable energy company, said it had assets of US$20.7 billion and liabilities of US$16.1 billion as of Sept. 30 last year.
SunEdison’s two publicly traded subsidiaries, TerraForm Power Inc and TerraForm Global Inc, are not part of the bankruptcy.
In a statement, the companies, known as yieldcos, said they had sufficient liquidity to operate and that their assets are not available to satisfy the claims of SunEdison creditors.
However, the bankruptcy “will present challenges,” including with financing agreements for certain projects, the yieldcos said.
Under chief executive officer Ahmad Chatila, SunEdison embarked on a rapid expansion that included entering new businesses like wind and energy storage and taking on projects worldwide. That growth racked up billions of dollars of debt.
Solar industry watchers said the bankruptcy was not a reflection of the sector, which is growing rapidly.
The company said it secured up to US$300 million in new financing from its first-lien and second-lien lenders, which is subject to court approval. The money will be used to support SunEdison’s operations during its bankruptcy.
“Our decision to initiate a court-supervised restructuring was a difficult, but important step to address our immediate liquidity issues,” Chatila said.
He said the company planned to use Chapter 11 to reduce debt, shed non-core operations and take steps to get the most value out of its technology and intellectual property.
Shares of SunEdison were halted, and last traded at about US$0.34 on the New York Stock Exchange. The company’s stock traded as high as US$33.44 in July last year.
Major SunEdison shareholders include OppenheimerFunds Inc with an 11.9 percent stake, BlackRock Inc with a 6.5 percent stake, The Vanguard Group with a 6.4 percent stake and Adage Capital Partners GP LLC with a 5.4 percent stake, according to court documents.
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