SunEdison is preparing to file for bankruptcy protection in the coming weeks. That’s a dramatic turn for a company that held a $10 billion valuation in July 2015.
The solar-power firm is preparing a chapter 11 filing and is in talks with two creditor groups to obtain a loan to fund its operations during the process.
Creditors are likely to take control of the company and its portfolio of power projects, sources close to those talks say.
SunEdison attempted to grow through a dangerous combination of financial engineering and cheap debt which it used to develop itself into one of the largest renewable-power plants in the country.
The company announced plans to purchase residential-rooftop installer Vivint Solar Inc., a $1.9 billion takeover that didn’t sit well with investors and led to the termination of that deal in March.
The company was then hurt by falling oil prices which caused a selloff for energy stocks, and capital-market issues that raised concerns about the company’s ability to continue financing acquisitions.
The company’s shares were hurt further after Securities and Exchange Commission and Justice Department investigations were revealed.
On Thursday a regulatory filing from the SEC was confirmed by SunEdison. The company also said it had received a subpoena from the Justice Department.
The DOJ is investigating whether a SunEdison employee acted improperly in takeover negotiations with Vivint.
The Wall Street Journal reported Tuesday that the SEC is investigating if SunEdison misrepresented its cash position to investors as its stock collapsed.
The company now has a market capitalization of about $150 million, and it had long-term debt of about $7.9 billion as of September 30, according to a regulatory filing.