SunEdison preparing to file for bankruptcy protection: WSJ

sunedison(h/t Raining Sky) Struggling solar developer SunEdison Inc is planning to file for bankruptcy protection in the coming weeks, The Wall Street Journal reported on Friday, citing people familiar with the matter.

Then company’s shares, down about 98 percent over the past 12 months, fell a further 45 percent in heavy extended trading to 23 cents each.

Once the nation’s fastest growing renewable energy developer, SunEdison is preparing to seek Chapter 11 protection and is in talks with two creditor groups for a loan to fund its operations during the process, the newspaper reported.

A spokesperson for Belmont, California-based SunEdison did not immediately respond to requests for comment.

The company faces a cash crunch after an aggressive acquisition strategy saddled it with $12 billion debt, and it has said in filings it faces scrutiny from regulators at the U.S. Department of Justice and the U.S. Securities and Exchange Commission over a failed deal and other issues.

The company’s creditors are likely to take control of the company and its portfolio of power projects, The Wall Street Journal reported, citing the sources.

The newspaper reported that SunEdison has been meeting with creditors to negotiate a loan to see it through bankruptcy, but competition for the deal among lenders has delayed an agreement.

Senior bank lenders led by Deutsche Bank AG form one camp of lenders while the other comprises a group of creditors, most of which are hedge funds focused on distressed companies, that participated in a junior debt offering in January that raised about $725 million, the newspaper said.

A bankruptcy at SunEdison, whose investors include prominent hedge fund investor David Einhorn of Greenlight Capital, would rank among the largest involving a non-financial company in the past 10 years, according to bankruptcydata.com.

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