What Caused SunEdison (SUNE) Stock to Drop 14% Today?

SunEdison Inc. (SUNE) Stock Plummets Over 14% Amid Debt Concerns

SunEdison Inc (SUNE) Stock Plummets Over 14% Amid Debt Concerns

Shares of SunEdison Inc (SUNE) took a major hit today, closing down over 14% as reports surfaced about the company’s mounting debts. Last week, the stock dropped 8% after SunEdison announced a delay in filing its annual report, sparking concerns among investors.

According to a report from Debtwire, SunEdison is currently in discussions with holders of its second-lien loans to secure a debtor-in-possession (DIP) financing facility. The talks have centered around providing the company with up to $300 million in new post-petition liquidity.

Axiom Capital analyst Gordon Johnson commented on the situation, stating, “DIP negotiation means that the company has effectively run out of cash and they get to pay their creditors ‘fair market value’ for the secured assets versus the contracted value.”

Despite the possibility of SunEdison filing for Chapter 11 bankruptcy protection, the company is reportedly looking to restructure its debt rather than go that route. The investor group holding term loans totaling $725 million has been unable to reach an out-of-court solution for the company’s cash shortage and debt issues.

SunEdison currently holds a Zacks Rank #2 (Buy), but with stock prices continuing to drop and debt concerns mounting, this rating could be subject to change in the near future.

Investors are advised to stay tuned for further developments as SunEdison navigates its financial challenges.

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