Solar Giant Might Be Doomed

Despite the recent rise in stock price the mounting financial woes of SunEdison have jeopardized the solar energy company’s plans to purchase residential solar developer Vivint and far from turning itself around the troubled company, based in Saint Peters, Missouri, under CEO Ahmad Chatila, has lost USD billions off its market value accruing USD 12 billion in debt in a two year acquisition spree of solar developers worldwide. The company has been named as “the biggest corporate implosion in U.S. solar history”. Late on Monday the company said that it would not be able to file its fourth quarter and 2015 annual earnings filings on time, due to an internal investigation started in late 2015. In a statement, the company said that the investigation could cause the company to “reassess its liquidity position.”

The company’s complex financial structure is only making matters worse. In 2014 SunEdison created a pair of “yieldcos”—publicly traded subsidiaries created to own completed solar projects. Yieldcos have become a favored structure for big solar companies because of the tax benefits and cash flow they provide, but at least in SunEdison’s case, Wall Street has soured on the strategy. The crash in its stock left SunEdison unable to shoulder the Vivint purchase or to complete other signed deals.

Now the company almost certainly faces a lawsuit from Vivint. It’s already being sued by Latin America Power, which it agreed to purchase for $733 million, and it faces millions of dollars in penalties for last month’s cancellation of planned solar projects for Hawaiian Electric.

The company has also delayed its 2015 earnings report while it conducts an internal investigation into the accuracy of its financial disclosures. In a statement, the company said that inquiry could cause the company to “reassess its liquidity position.” In other words, SunEdison, once the world’s largest developer of renewable energy projects (and No. 6 on MIT Technology Review’s 2015 list of 50 smartest companies), could file for bankruptcy very soon.

(Read more: Reuters, Bloomberg, Wall Street Journal)