Solar developer SunEdison in bankruptcy as aggressive growth plan unravels

Fri Apr 22, 2016 2:43am EDT
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By Tom Hals and Nichola Groom

(Reuters) - SunEdison Inc SUNE.N, once the fastest-growing U.S. renewable energy company, filed for Chapter 11 bankruptcy protection on Thursday after a short-lived but aggressive binge of debt-fueled acquisitions proved unsustainable.

In its bankruptcy filing, the company said it had assets of $20.7 billion and liabilities of $16.1 billion as of Sept. 30.

SunEdison's two publicly traded subsidiaries, TerraForm Power Inc (TERP.O: Quote) and TerraForm Global Inc (GLBL.O: Quote), are not part of the bankruptcy. In a statement, the companies, known as yieldcos, said they had sufficient liquidity to operate and that their assets are not available to satisfy the claims of SunEdison creditors.

The bankruptcy "will present challenges," however, including with financing agreements for certain projects, the yieldcos said.

The Chapter 11 filing caps SunEdison Chief Executive Officer Ahmad Chatila's seven-year quest to transform a struggling maker of silicon wafers into a renewable energy giant able to capitalize on burgeoning demand for solar and wind energy amid growing concerns about climate change.

Chatila was named CEO of what was then called MEMC Electronic Materials in 2009 and almost immediately bought fledgling solar project developer SunEdison. The company changed its name four years later and embarked on a rapid expansion that included entering new businesses like wind and energy storage and taking on projects worldwide. That growth racked up billions of dollars of debt.

Solar industry watchers said the bankruptcy was not a reflection of the sector, which is growing rapidly.

"SunEdison had a balance sheet that is way out of line with any other solar company," said Shayle Kann, senior vice president and renewable energy research firm GTM Research. "The projects themselves are good. They just bought too much to quickly."   Continued...

The headquarters of SunEdison is shown in Belmont, California in this April 6, 2016 file photo. REUTERS/Noah Berger/Files