Sydney: SunEdison Inc., a US renewable-energy company, is preparing to file for bankruptcy protection and is in talks with two creditor groups for a loan to tide it over during the process, the Wall Street Journal reported, citing unidentified people familiar with the matter.
Creditors will probably take control of the company, whose market value stood at almost $10 billion (Dh36.72 billion) in July before a plunge in the stock, and its power projects, the newspaper cited the people as saying Friday.
While SunEdison has held meetings with creditors to negotiate a loan to see it through the chapter 11 filing, competition for the deal among lenders has delayed an agreement, the journal cited people familiar with the talks as saying. On one side are bank lenders led by Deutsche Bank AG, the newspaper cited the people as saying; on the other are a group of creditors, mainly hedge funds focused on distressed companies, that participated in a junior-debt offering in January that raised about $725 million, according to the Journal.
SunEdison’s stock plunged about 45 per cent in post-market trading following the report. Its market capitalization is about $150 million, according to data compiled by Bloomberg. The company had long-term debt of about $7.9 billion as of September 30, according to a regulatory filing, the Journal reported.
A bankruptcy filing would be problematic for SunEdison’s TerraForm Power Inc. and TerraForm Global Inc., the newspaper said. The two, which own power plants and sell energy to utilities under long-term contracts, are in far better financial shape than SunEdison but depend on the company for many services, it said.
The units don’t plan to file for bankruptcy protection, but their shares represent much of SunEdison’s value, the journal said. In recent months, bidders have inquired about purchasing SunEdison’s stakes in one or both of the TerraForm entities, it cited people familiar with the conversations as saying.