WSJ: SunEdison Preparing To File For Bankruptcy

(RTTNews) - SunEdison Inc. (SUNE) is preparing to file for bankruptcy protection in the coming weeks and is in talks with two creditor groups to obtain a loan to fund its operations during bankruptcy, the Wall Street Journal reported Friday, citing people familiar with the matter.

Shares of the solar energy company fell more than 45 percent in extended trades Friday. The company's market capitalization, which was nearly $10 billion in July, has fallen to $136 million as on Friday.

According to the WSJ report, creditors are likely to take control of the company and its portfolio of power projects. However, competition for the deal among the lenders is said to have delayed a deal.

One camp of creditors reportedly includes senior bank lenders led by Deutsche Bank AG, while the other group includes hedge funds that are focused on distressed companies. The company's shares have fallen on bankruptcy fears as well as on news that it is facing investigations by the Securities and Exchange Commission and Justice Department.

In addition, worries about SunEdison's ability to finance acquisitions increased amid the board selloff for energy stocks due to the plunge in oil prices and the turbulence in capital markets.

The company's proposed $1.9 billion takeover of residential rooftop installer Vivint Solar Inc. (VSLR) was not popular among its investors. In March, Vivint Solar terminated the merger agreement.

In December 2015, SunEdison terminated a deal with Light S.A. to acquire an about 16 percent stake in Brazilian renewable-source power generation company Renova for $250 million. The company terminated this agreement as a result of certain conditions precedent to closing not being satisfied.

According to the WSJ report, a bankruptcy filing by SunEdison would be problematic for the company's two yieldcos, TerraForm Power Inc. (TERP) and TerraForm Global Inc. (GLBL).

SUNE closed Friday's regular trading session at $0.43, down $0.11 or 20.4 percent on a volume of 92.64 million shares. In after-hours, the stock further declined $0.20 or 45.35 percent to $0.235.