Judge Approves Interim $90 Million SunEdison Lifeline

SunEdison Inc., the solar-power giant that filed for bankruptcy Thursday in a dramatic reversal of fortunes, won court permission Friday to tap part of a $300 million bankruptcy lifeline from its existing lenders.

Judge Stuart M. Bernstein of the U.S. Bankruptcy Court in Manhattan said the company could borrow $90 million of the loan and signed off on SunEdison's other requests to ease its transition into bankruptcy while it works out a plan to cut its multibillion debt load.

"The company needs liquidity, that's first and foremost," said James J. Mazza, a lawyer for SunEdison, noting that the loan approved Friday had been the subject of "hard-fought and often contentious" negotiations over several weeks.

When it filed for chapter 11 protection, SunEdison and 25 affiliates listed more than $16 billion in debts, court papers show. The company, the world's largest renewable-energy developer, was worth nearly $10 billion as recently as last summer, but only about $18 million in cash on hand at the time of its chapter 11 filing.

In addition to the much-need cash, the bankruptcy financing package permits existing letters of credit to be renewed and extended during the bankruptcy, resolving a dispute that could otherwise have paralyzed the company, Mr. Mazza said.

The bankruptcy loan is being provided by a consortium of its first-lien lenders and second-lien bondholders, court papers show. Mr. Mazza said the company is open to other financing arrangement, should any develop.

"It's the best we've been able to do right now," Jay Goffman, another SunEdison lawyer, told the judge.

Judge Bernstein on Friday also approved motions allowing SunEdison to continue paying and providing benefits to its more than 1,600 employees, continue providing services to its customers and keep up payments to vendors and suppliers. The company said in a statement Thursday it anticipates only minimal disruptions to its projects and partnerships as a result of the bankruptcy.

On Friday afternoon, SunEdison also is expected to ask Judge Bernstein to appoint an independent investigator, known as an examiner, to probe the company's business dealings and its relationship with its so-called yieldco affiliates, which weren't included in Thursday's bankruptcy filing.

The request has drawn fire from unsecured creditors, who in court papers objected to allowing the company to set the scope, cost and duration of the investigation.

Write to Tom Corrigan at tom.corrigan@wsj.com