Daily Management Review

"Sun Giant" SunEdison announced bankruptcy


04/22/2016


American SunEdison, one of the largest companies in the world in the field of alternative energy, filed for protection from creditors.



"Sun Giant" SunEdison announced bankruptcy
The statement on the U.S. bankruptcy code 11, Chapter 11, filed on Thursday, April 21 at the court in cases of bankruptcies for the Southern District of New York, reported that the volume of the company's assets is $ 20.7 billion, while total debt is $ 16.1 billion.

The statement also notes that major shareholders are large US investment funds: Oppenheimer Funds (11,9%), BlackRock (6,5%), Vanguard Group (6,4%) and Adage Capital Partners (5,4%). After applying, trading of SunEdison’s shares on the New York Stock Exchange (NYSE) were suspended.

The company held the IPO in 1995. One of SunEdison’s main business directions is the construction of solar power plants and supply of equipment to them.

Quotes of SunEdison reached their maximum in July 2015 at $ 33 per share. At that time, the company’s market cap was $ 10 billion. Thus, until recently, SunEdison was the largest solar industry company, traded on the US stock market.

At the end of April 2016, SunEdison fell below $ 1 per share for the first time since holding the IPO more than 20 years ago.

SunEdison’s CEO Ahmad Chatila said in a press release:

"Our decision to restructure the company's assets under judicial control was difficult, but important in terms of improving the liquidity situation in the short term. The trial will allow us to adapt to the financial assets of the balance of the company's capabilities and reduce the debt burden, which will contribute to the further development of the company."


Experts point out that too rapid development in 2014-2015 occurred to be critical for SunEdison. It happened on the background of the drop in the profitability of renewable energy projects with the oil prices collapse, combined with the attraction of an excessively large amount of debt.

According to Good Jobs First, the analysis center grants, loans and other subsidies granted by the US Federal Government, the company SunEdison has received state subsidies and loans for a total of $ 650 million.

In addition, SunEdison has become the latest US company to file for bankruptcy, which is subsidized by the US Treasury Department in support of alternative energy program approved by President Barack Obama.

In recent years, companies such as A123 Systems, Fisker Karma, Solyndra, Evergreen Solar, SpectraWatt, Stirling Energy Systems, Solar Millennium and several other, smaller companies went bankrupt.

In February 2016, a US subsidiary of the Spanish company Abengoa filed an application for protection from creditors; the size of the US government subsidies amounted to $ 2.7 billion.  

source: forbes.com






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