SunEdison filed for bankruptcy protection on Thursday, a two-year period of frenzied dealmaking having culminated in the collapse of the former poster child for renewable energy.
As it grew from a manufacturer of solar wafers to a developer and seller of solar projects, SunEdison committed to more than $18 billion in acquisitions, financing them by raising $24 billion through debt and equity offerings. That “rapid evolution … has resulted in operational and liquidity constraints,” the company said in its Chapter 11 filing.
The petition listed assets of $20.7 billion and liabilities of $16.1 billion as of Sept. 30. SunEdison’s stock price has collapsed from above $33, valuing the company at nearly $10 billion, to the current 34 cents.
“Our decision to initiate a court-supervised restructuring was a difficult but important step to address our immediate liquidity issues,” SunEdison CEO Ahmad Chatila said in a news release. “The court process will allow us to right-size our balance sheet and reduce our debt.”
SunEdison’s publicly-traded yieldcos, TerraForm Power and TerraForm Global, are not part of the filing. But SunEdison used the yieldcos to finance and backstop some deals and The Wall Street Journal warned that those ties could draw them into pending litigation over uncompleted transactions.
Of 11 deals reached since last May, SunEdison has failed to close five with a combined value of about $3.8 billion, according to FactSet. Most notably, the proposed $1.9 billion takeover of Vivint Solar collapsed after banks refused to fund it.
“Because [the yieldcos] don’t plan to file for bankruptcy protection, they likely wouldn’t get the same litigation shield as SunEdison,” the WSJ said.
In a court document, SunEdison finance executive Patrick Cook said the company’s problems closing existing deals or generate new deals had “created a liquidity crunch— making operating in chapter 11 necessary to restructure and rebuild the confidence that is the lifeblood of SunEdison’s ‘dealmaking’ engine.”
The company owes creditors nearly $10 billion, according to regulatory filings. “SunEdison had a balance sheet that is way out of line with any other solar company,” Shayle Kann, senior vice president at GTM Research, told Reuters.