SunEdison, one of US' fastest-growing renewable energy companies, filed for Chapter 11 bankruptcy protection after a short-lived but a very strong binge of debt-fueled acquisitions proved unsustainable.
According to The Wall Street Journal, SunEdison would utilize the bankruptcy process to reduce its borrowings, which currently stand at more than $16 billion. This includes the debt of two publicly traded subsidiaries -Terraform Global, and TerraForm Power. The two subsidiaries failed to file bankruptcy and said they have enough liquidity to continue their operation, though most of SunEdison's worth is derived from its controlling stake in them.
In SunEdison's filing, the company has liabilities of $16.1 billion and assets of $20.7 billion as of September 30. Reuters reported that the bankruptcy filing caps CEO Ahmad Chatila's long-running quest to transform a struggling maker of silicon wafers into a renewable energy giant.
In 2009, Chatila was appointed as CEO of what was then named MEMC Electronic Materials. The company almost immediately purchased the solar project developer SunEdison. The company changed its name four years later and went for expansion at a rapid rate, including new business like energy and wind storage. However, the company's growth obtained billions of dollars of debt.
Shyle Kann, senior vice president at GTM Research said the projects run by SunEdison were good, but they just bought too much too quickly. She added that the company's balance sheet was way out of line compared to other solar company.
SunEdison said it had already secured $300 million in bankruptcy debt financing to continue operations and pay their employees, reports USA Today. Amid SunEdison's shrinking of finances in the recent month, the company was able to bid $2.2 billion to acquire Vivint Solar.
In 2007,SunEdison's market capitalization rose to $17.5 billion, as high as oil prices fueled interest in renewable alternatives to fossil fuels.
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