DING DONG THE WITCH IS DEAD
John’s latest update on corruption, bribery and waste in the energy sector.
SunEdison SUNE, + 0.83% said Thursday it filed for bankruptcy, a move investors have been waiting for weeks. Shares in the renewable energy company have been suspended for news. The company said it has secured $ 300 million in debtor-in-owner financing to minimize business disruptions during its restructuring. “Our decision to initiate a court-supervised restructuring was a difficult but important step in resolving our immediate liquidity problems,” said Managing Director Ahmad Chatila. SunEdison said his production company, TerraForm Power TERP, + 8.11% and TerraForm Global GLBL, + 9.62% were not part of the file. TerraForm Power shares jumped 4.1% in morning trading and TerraForm Global shares jumped 3%.
The potential legal damages resulting from deals SunEdison failed to make as its finances deteriorated could total hundreds of millions of dollars, according to court documents and people familiar with the deals. Litigation over failed transactions could add to the company’s already long list of creditors and potentially spread to its publicly-traded subsidiaries.
SunEdison’s rapid rise and fall has been fueled by its appetite for takeovers and the availability of cheap Wall Street money to fund them. When that funding dried up during a volatile period in the markets and a drop in oil prices, SunEdison withdrew from several transactions.
Of 11 deals made since last May, SunEdison has failed to secure five with a combined value of about $ 3.8 billion, according to FactSet. It is in litigation or arbitration on two of them, and other counterparties are examining litigation options, according to people familiar with the matter.
It’s a scary clip from February of last year. SunEdison’s CEO told CNBC his company was at least 25% undervalued.
SunEdison CEO: We’re 25-30% Undervalued
While SunEdison’s fate is virtually sealed, the fate of its production companies TerraForm Power and TerraForm Global is less certain. But they could also be in trouble if SunEdison goes bankrupt.
In late March, TerraForm Global warned investors that some of its debt repayments could be accelerated if SunEdison files for bankruptcy and some power purchase agreements on projects could be reduced. One of the main issues was the payment of $ 231 million to SunEdison for 425 MW of unfinished projects in India. By all accounts, these projects will not be completed on time or at all, which led TerraForm Global to sue SunEdison earlier this month.
What makes TerraForm Global so risky for investors is the fact that a default by SunEdison could lead to a cascade of financial impacts that could lead to a default by yieldco. And without updated financial statements since the end of September, it’s difficult to assess what SunEdison’s finances actually look like.
TerraForm Power, a yieldco of SunEdison, has a recently confirmed, but undisclosed SEC probe. In a letter dated March 14, 2016, the SEC confirmed that enforcement proceedings were pending at TerraForm Power.
In late March 2016, SunEdison disclosed a DOJ and SEC investigation. This followed the company’s delayed 10-K filing announced in late February 2016. Yet recent information received from the SEC shows that TerraForm Power, a “yield company” of SunEdison, was already under investigation by the SEC before either of these two events occurred at SunEdison. To date, the SEC investigation into TerraForm Power, which was confirmed to be ongoing as of March 14, 2016, has not been disclosed.
Through the issues, Electrek learned that Tesla had hired a key member of SunEdison’s energy storage team. Mohammad C. Bozchalui is an expert in network solutions. He holds an MSc in Electrical Engineering from the University of Tehran and a doctorate in Power and Energy Systems at the University of Waterloo, according to its LinkedIn profile.
In one 13D filing on SUNEDISON, Inc. David Einhorn’s hedge fund, Greenlight Capital, disclosed a 2.8% stake, or 11,331,833 shares, in the company. This is a decrease of 58.26% compared to the 27,151,576 shares held at the end of the last quarter ended March 31, 2016.
Paul Pelosi invested in SunEdison weeks before Wind’s first purchase
WASHINGTON – Democratic House leader Nancy Pelosi’s husband bought up to a quarter of a million dollars in shares of SunEdison, a currently struggling green energy company, just weeks before announcing a major acquisition in 2014 which drove up its share price. SunE’s 2014 purchase of wind power company First Wind “further strengthened the reputation of the company,” wrote a market observer at the time. Perhaps unsurprisingly, SunEdison’s stock jumped 29% on news of the acquisition alone.
Pelosi’s husband, Paul Pelosi, had invested just in time. He purchased between $ 100,000 and $ 250,000 in SunEdison stock on October 24, 2014, according to congressional financial information. The company ad its acquisition of First Wind on November 17.
Pelosi has previously been accused of trading stocks based on information gleaned from her official duties. A law passed as a result of the controversy prohibits members of Congress from using non-public information for personal gain. The language to this extent has been informally nicknamed the “Pelosi disposition”.
Additionally, Federal Election Commission records made available by the Center for Responsive Politics show SolarReserve board member James McDermott has contributed $ 61,500 to various Democratic campaigns since 2008, including $ 30,800. to Obama’s presidential election campaign.
McDermott’s U.S. renewable energy group has a significant financial stake in SolarReserve and has come under scrutiny for its ties to Senate Majority Leader Harry Reid – and for create green jobs in China.
And Lee Bailey, another SolarReserve board member and investor in US Renewables, has donated $ 21,850 since 2008 to Democratic candidates, including President Obama, Senate Majority Leader Harry Reid. , California Senator Barbara Boxer and then-presidential candidate Hillary Clinton.
SolarReserve’s board of directors also includes Jasandra nyker of Pacific Corporate Group Asset Management, where the brother-in-law of former Chamber President Nancy Pelosi, Ronald pelosi, occupies a leading position.
NEW YORK – The collapse of a multinational renewable energy company based in Spain could embarrass the election year not only President Obama, Hillary Clinton, the Clinton Foundation and the Democratic Party, but also Republican presidential candidate Ted Cruz and his wife Heidi, through their links with Goldman Sachs.
This blockbuster saga involves the law-breaking Spanish conglomerate that has direct ties to a host of powerful American Democrats, who have pocketed more than $ 3 billion in U.S. taxpayer dollars, the vast majority coming from the country’s trillion dollars. President Obama. stimulus package, coupled with praise of the president, is imploding.
Democratic billionaire Tom Steyer donated over $ 20 million to candidates and outside groups to influence this year’s election, making him the top individual contributor in 2014. And that’s only a fraction of the $ 50 million Steyer said he was willing to spend.
Pelosi, the former Speaker of the House who currently serves as Democratic leader, used her Washington perch to boost some of Steyer’s plans with government help. In total, Steyer has benefited from over $ 1 billion in taxpayer dollars. Pelosi is responsible for a portion of that total, according to its own press releases.
OIL AND GAS BANKRUPTCY
Four other Texas energy companies filed for bankruptcy last week, bringing the total to 21 North American producers who have filed since the start of the year, according to data from Haynes & Boone. Since the start of 2015, 63 North American producers have filed for bankruptcy. Of these companies, the largest concentration is based in Texas, with 31 of them originating from Lone Star State. Here are the latest companies to join the Texas Energy Bankruptcy Club.
Haynes and Boone has followed 63 North American oil and gas producers who have filed for bankruptcy since early 2015. These bankruptcies, including Chapter 7, Chapter 11, Chapter 15, and Canadian cases, involve approximately $ 22.5 billion in cumulative guaranteed and unsecured debt. . As of April 15, 2016, 21 producers had filed for bankruptcy this year. All indications suggest that many more producer bankruptcy filings will occur in 2016.