World’s Top Alt Energy Producer Files Chapter 11

Missouri-based SunEdison, the world’s largest corporate renewable energy producer, put rumors of its financial demise to rest Thursday when it officially filed for Chapter 11 bankruptcy protection. The case underscores some of the dangers of overly rapid expansion as well as hedge fund-driven business models in more volatile industries.

SunEdison filed in U.S. Bankruptcy Code for the Southern District of New York, which is widely considered one of the two most debtor-friendly jurisdictions for such proceedings in the country. As noted in the April 14 edition of NACM’s eNews, late 2015 whispers of financial problems evolved into an increasingly loud buzz last month when SunEdison delayed filing its year-end financial numbers (Form10-K) and 4Q2015 earnings information releases.

Aggressive expansion into new global markets, as well as new product lines, pushed SunEdison to the largest market share in the renewable industry. That expansion also invited risk-based problems at levels experienced by few of its competitors. Coming out of the last wave of alternative energy bankruptcies that ramped up early this decade, largely because of domestic producer oversaturation and allegations of Chinese product dumping at artificially low prices, the company’s rapid and bold expansion peaked in 2014 and 2015 and included ventures into several now-struggling “emerging economies.” In recent months, SunEdison’s plans for one corporate takeover fell apart at the last minute because of investor allegations of misrepresentation of its financial health. In addition, its stock price fell by about 98% in less than a year.

- Brian Shappell, CBA, CICP, NACM managing editor

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