In a rather cryptic statement issued today on its website, SunEdison Inc. announced a new "global initiative," which aims to "optimally position the company for long term profitable growth." The statement was published just a day after Greentech Media reported a leaked memo from September 30, which indicated up to 10% of the companys 7,300 workforce would be cut.
"Overall, the proposed changes result in an overall reduction of about 30%, 20% being from non-labor expenses and about 10% from headcount reduction … Most of the changes will be announced during the fourth quarter with some final steps expected in the first quarter of 2016," the memo reportedly read.
pv magazine has attempted to contact SunEdison via email and phone, with no result. In todays statement, the company said the goal of its initiative is to optimize business operations and "accelerate cash flow positive operations."
Citing a quarterly run-rate of 1 GW, SunEdison says it will:
- Focus on core, high profit-potential markets such as the U.S, India, China and Latin America (i.e. narrow its current geographical scope);
- Simplify its business structure by removing duplicative activities created as a result of recent M&A activities and business growth, through centralizing global business development and operations, and consolidating global support teams (e.g. finance, legal, etc.); and
- Rationalize purchased services to deliver cost reductions and capture economies of scale.
The company will hold an investor presentation this Wednesday, where CEO, Ahmad R. Chatila and CFO, Brian Wuebbels will discuss the changes further.
SunEdison has lost around 80% of its share value this year from a high of US$33.45 in July to $8.14 last week following a number of acquisitions, which has seen its debt increase almost two-fold to $10.7 billion at the end of Q2 2015. This has also seen interest expenses grow to $302 million. In particular, the acquisition of residential solar company, Vivint Solar has been seen as strange by some, in light of SunEdisons utility-scale focus.
In addition, the company has formed two yieldco vehicles, one of which, TerraForm Power Inc. is also performing badly, having lost 49% of its share value to date this year. On the back its share price plunge, CreditSights, in a recent report, points to a $410 million loan secured by the yieldco, on which SunEdison now reportedly faces a collateral call.
In other SunEdison news, an explosion and fire at a company-owned polysilicon plant in Pasadena, Texas, saw four workers injured last Friday, October 2. Bloomberg reported that the injuries were not life threatening and that the fire had been extinguished. Again, no one from SunEdison could be reached for comment.