SunEdison's failure to comply with requirements terminates $2.2 billion Vivint merger deal

Vivint Solar, a rooftop solar panel installer, has cancelled the deal with solar energy company SunEdison. The deal would have made the latter acquire Vivint solar.

The deal worth $2.2 billion which was forged last July faced criticisms from border assets and other investors as SunEdison's finances and share weakened. The company's share was up to 41 percent at $2.68 in the premarket trading.

Vivint said it intends to seek all legal remedies available as a result of the deliberate breach made by SunEdison. According to a Cowen and Co. analyst, it is better for both companies to be on their own as the US lawmakers extended solar investment tax credits beyond 2016 which gives the solar power industry a new life, according to CNBC.

Just like any other companies, SunEdison has been hit by the drop in oil prices and is also facing criticism for trying to expand quicker by an acquisition that it cannot afford. According to Reuters Africa, the company's appropriating limitations made it impossible for the company to complete the acquisition of Vivint.

SunEdison which has a market value of $600 million had a long-term debt of $9.7 billion as of September 30. The company said it would delay the filing of its annual reports due to some internal investigation regarding its financial position.

As reported by Forbes, the delay has created a continuous issue for SunEdison. It was relying on the $300 million credit from a number of banks to close its deal with Vivint. However after the 10-k delay, those banks opted to pull the credit out due to the company's inability to meet the requirements for their funding commitment.

Without the support from the bank, there is no way SunEdison will be able to close the deal. This issue caused Vivint's decision in terminating the multimillion dollar deal. On Monday, SunEdison's stocks lost 94 percent of its value since the Vivint deal was announced while Vivint's stock has also fallen down to 52 percent.

Tags

Vivint Solar, SunEdison, Vivint Solar-SunEdison merger, SunEdison's financial constraints, $2.2 billion merger deal, solar panel, solar energy

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