SunEdison

SunEdison says in talks for potential DIP financing

Markets Reuters

Troubled solar energy company SunEdison Inc said on Friday it was in talks for potential debtor-in-possession financing with some of its first and second-lien lenders.

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SunEdison, which is widely expected to file for bankruptcy soon, said it needed about $310 million to stay in business, estimating a cash shortfall of $260 million by mid-June.

The company's shares, which have lost nearly all of their value in the past 12 months, were down 19.3 percent at 47 cents in early trading.

SunEdison said it expected to secure the financing by pledging assets, including those of its units.

Typically, companies enter into debtor-in-possession financing after they file for bankruptcy protection to maintain liquidity while they reorganize.

Analysts said that while the decision to seek debtor-in-possession financing did not necessarily mean company would file for bankruptcy, it was likely that this would happen soon.

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"It is definitely a sign that they are thinking about it because they are trying to get the arrangement in place before they file," said Justin Forlenza, an analyst at credit research firm Covenant Review.

SunEdison, which had debt of about $12 billion as of Sept. 30, laid out three scenarios to continue in operation. Two included bankruptcy expenses of more than $70 million.

The company said it entered into confidentiality agreements with lenders on March 17. (http://bit.ly/1SGdzfX)

Debtwire first reported in March that SunEdison was in talks with holders of its second lien loans to fund a DIP facility. (http://bit.ly/1SGjams) (Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty and Ted Kerr)