SunEdison shares tumble 55% on bankruptcy filing fears
Shares of renewable power firm SunEdison plummeted 55% Tuesday as it teetered on the edge of bankruptcy amid slumping oil prices and swirling questions over the company’s accounting practices. SunEdison faces a “substantial risk” of bankruptcy, according to the U.S. Securities and Exchange Commission filing by a subsidiary, TerraForm Global. SunEdison develops, installs and operates alternative energy projects.
The warning comes about two weeks after SunEdison delayed its annual report following concerns that the company had misreported certain aspects of its financial performance. Additional signs of trouble emerged in early March when the ailing company’s proposed acquisition of rooftop solar company Vivint collapsed when SunEdison couldn’t line up the financing necessary to complete the deal.
SunEdison shares (SUNE) plummeted 69 cents, or 55%, to close at 57 cents a share. A SunEdison spokesman declined to comment. Analysts say the company’s biggest issue is having enough cash. “The primary reason that (SunEdison) is facing a precarious situation is due to a lack of liquidity,” burdened by poor cash flow and high debt levels, Reorg Research distressed debt analyst Graham Meharg said in an email.
The Wall Street Journal also reported Tuesday that SunEdison faces an SEC investigation over the possibility that it had exaggerated its cash position. aThe Maryland Heights, Mo.-based company has blamed the issue primarily on “deficient information technology controls in connection with newly implemented systems” and has said a board committee is examining the situation.