Report Says Sunedison In Talks With Second Lien Holders, Shares Crash

Shares of Sunedison Inc SUNE are down heavily on Tuesday amid a report the company is meeting with second lien holders, according to Debtwire.

"SunEdison is in negotiations with holders of its second lien loans to fund a DIP facility," two sources familiar with the matter told the outlet. The reported added that the second lien investor group includes holders of "aggregated USD 725m Libor +1000bps second lien term loans A-1 and A-2, both of which come due in 2018."

These talks are an attempt by the creditors to reach an "out-of-court solution" to Sunedison's liquidity and leverage problems, adding that the company is also searching for a DIP loan, Debtwire said.

From Bad To Worse

Things seem to continue going from bad to worse for SunEdison shareholders. Earlier this month, shares of the battered stock surged 33 percent when news broke that SunEdison had terminated a potential buyout of Vivint Solar Inc VSLR.

SunEdison has also yet to report its full 2015 annual earnings report due to an ongoing internal investigation of its reporting controls.

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Assuming SunEdison gets its internal issues under control, it must still convince the market that it can continue to sell projects without strong demand from TerraForm Power Inc TERP and TerraForm Global Inc GLBL.

Most importantly, SunEdison must convince the market that it will not drown under the weight of its $8 billion in debt. SunEdison must come up with a viable plan to reduce or re-structure its debt, presumably not at the expense of its common shareholders.

Following Tuesday’s sell-off, SunEdison is now down 92.8 percent in the past year. Calls Debtwire made to Sunedison were not immediately returned.