SunEdison Inc. has announced that it has filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Southern District of New York.
SunEdison’s publicly traded yieldcos, TerraForm Power and TerraForm Global, are not part of the filing. Earlier this month, SunEdison was sued by TerraForm Global for $231 million that TerraForm says was misappropriated by its parent company.
“Our decision to initiate a court-supervised restructuring was a difficult but important step to address our immediate liquidity issues,” says Ahmad Chatila, CEO of SunEdison. “The court process will allow us to right-size our balance sheet and reduce our debt, providing the opportunity to support the business going forward while focusing on our core strengths.
“It also will facilitate our continued work towards transforming the company into a more streamlined and efficient operator, shedding non-core assets, as well as taking other steps, to help us get the most value out of our technological and intellectual property.
“As a result of this process, we expect that SunEdison will be in an even better position over the long term to utilize our capabilities in the renewable energy sector in service of our customers, business partners and employees,” Chatila continues.
SunEdison says it has secured commitments for new capital totaling up to $300 million in debtor-in-possession (DIP) financing from a consortium of first- and second-lien lenders. Subject to court approval, these financial resources will be made available to SunEdison to support its continuing business operations, minimize disruption to its worldwide projects and partnerships, and make necessary operational changes.
According to SunEdison, new financing will support day-to-day operations during the reorganization, including the following:
- Proceeding with work on ongoing projects, both in the U.S. and elsewhere;
- Paying wages and benefits for employees;
- Continuing to provide services to customers;
- Paying vendors and suppliers in the ordinary course for goods and services provided on or after the date of the Chapter 11 filing; and
- Complying with all regulatory obligations.
SunEdison has made customary filings, including first day motions, with the court, which, if granted, will help it transition into Chapter 11 without disruption. The motions are expected to be addressed by the court promptly following the filing and include, among other things, a request for approval of the DIP financing, as well as requests for authority to make wage and salary payments, continue various benefits for employees, honor certain customer programs and other relief in order to continue the day-to-day operations of SunEdison.
Additional information on the restructuring can be found here.
