SunEdison is having more than its share of troubles. While a major high-efficiency solar manufacturing partnership in China is moving forward, the worlds largest renewable energy developer is suffering under a collapsed stock price, multiple lawsuits, and an accounting investigation as it attempts to move forward with its controversial acquisition of Vivint Solar.
On Monday, SunEdison and yieldco TerraForm Power informed federal regulators that they would be late in filing the annual summaries of their financial performances through 10-K forms, with SunEdison citing the ongoing investigation of claims by former executives through an audit committee. Both Deutsche Bank and SunEdison note that the audit committee has not yet found any wrongdoing based on these allegations, although the investigation is ongoing.
Regardless, this appears to be the final straw that moved Deutsche Bank to suspend its rating of the company on Tuesday. While a research note by Analyst Vishal Shah noted the inherent value in the companys development business, he also stated warned that the liquidity situation of the company is difficult to assess, and that Deutsche Bank was therefore suspending its rating.
In the Tuesday note, Deutsche Bank observed that yieldco TerraForm Power was delaying a decision on its dividend until financial statements and other pending matters are resolved. And while there is no indication that this will change, on Wednesday morning, SunEdisons second yieldco, TerraForm Global, issued a press release indicating that it will issue a Q4 dividend of US$0.275 per share payable on March 17.
TerraForm Global also noted that its 10-K would be filed by March 30, and expects to release its Q4 results closer to that date.
While the acquisition of Vivint appears to be moving forward, the ongoing lawsuit by Appaloosa Management could throw a wrench in SunEdisons plans. Appaloosa has informed the media that the judge presiding over the case has warned Goldman Sachs that he retains the option of stopping the transfer of Vivint Solars assets. This in turn could undermine the basis of a loan from Goldman Sachs which SunEdison was planning to use to finance the acquisition.