SEC investigating alleged SunEdison liquidity claims


Following last week’s reports that beleaguered U.S. clean energy firm SunEdison had entered into debtor-in-possession talks with a bankruptcy filing increasingly likely, the Wall Street Journal (WSJ) has reported that the Securities and Exchange Commission (SEC) is investigating the company’s liquidity claims.

Specifically, the SEC is looking into claims made last August by SunEdison that it had more than $1 billion in cash to hand and was looking to form a warehouse investment vehicle alongside a fund managed by Goldman Sachs Group.

According to the report, SunEdison’s Q3 filing’s were misleading, stating that the $1.4 billion the company had in cash consisted largely of equity that it could not access. That reported balance had dropped below $100 million by November, WSJ allege.

In the WSJ report, it states that the $1.4 billion figure was largely "trapped inside individual power projects and earmarked for construction or debt service", making the funds off-limits to SunEdison. The figure also included a $500 million credit facility that could only be accessed if SunEdison was able to meet certain criteria.

Having seen its shares tumble by more than 95% in the space of a year, SunEdison has been struggling to pay contractors and suppliers, spooking would-be partners and collaborators in the process. Late last year the Hawaii utility Hawaiian Electric Co. terminated three PPAs for 148 MW of completed solar projects, while a few weeks ago U.S. residential solar company Vivint Solar terminated a proposed merger and acquisition by SunEdison.

Last week, rumors emerged that SunEdison was in talks with advisors on a potential Chapter 11 bankruptcy filing, and the company’s continued silence on such matters – allied to its delayed Q4 financial reports – only serves to stoke the flames of doubt over its long-term stability.