Recovery Or Bankruptcy: Where Will Sunedison Be A Year From Now?

March 25, 2016 9:35 am
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About a year ago, Sunedison Inc (NYSE: SUNE) CEO Ahmad Chantila told CNBC he believed Sunedison's stock was "25-30 percent undervalued at this moment." Since that interview, shares are down more than 95 percent. The stock closed Thursday at $1.21, after trading over the $30 level a year ago.

"Sunedison amassed a massive amount of debt," Axiom's Gordon Johnson told Benzinga's PreMarket Prep in January. "The majority of that debt was used to buy projects they intended to drop down into their yieldco."

He noted Sunedison took on $10 billion in new debt from 2011-2015. "Essentially what happened is the yieldco story ended, and this was a company left with a lot of debt and a lot of projects which are extremely capital intensive. When the yieldco story fell apart, you didn't have that buyer of first resort."

Related Link: The Beginning Of The End For Sunedison?


The latest news on the company this week is a report from Debtwire. The report said Sunedison is in Debtor-in-Possession (DIP) negotiations with second lien load holders, following the failure of out-of-court talks in reaching a resolution regarding Sunedison’s liquidity and leverage problems.

Johnson said this report suggests that Sunedison's "current cash position is dire, if not completely compromised." He also noted that if Sunedison is forced to liquidate projects of its 5.5GW backlog due to bankruptcy, it would adversely impact the fundamentals of U.S. solar market projects.

So, where do you think Sunedison will in a year from now?

A Benzinga Twitter poll came back with some interesting results.

Forty-five percent said the stock will recover and actually trade above the $5 level. Conversely, 41 percent said the company will go bankrupt. Just 6 percent believe it will stay at its current level.

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