The SunEdison (SUNE) saga just hit a new height, and shares are tumbling.
In a regulatory filing on Monday, the Missouri-based renewable energy company said it will be unable to release its 2015 financial results on time. The delay is due in part to an internal investigation, which was launched late in 2015, tied to allegations former executives at SunEdison made about the company's financial position. So far, the audit committee conducting the investigation has found no wrongdoing based on the allegations. SunEdison declined to comment further on investigation.
There have been several changes to the board and management of SunEdison and its yieldcos, TerraForm Power (TERP) and TerraForm Global (GLBL). Most recently, SunEdison announced the departure of its chief operating officer, Francisco Perez Gundin, in January. In November, Gundin resigned from TerraForm Power's board because he disagreed with actions the board took, according to an SEC filing. The measures included replacing members of its corporate governance committee and appointing SunEdison's CFO Brian Wuebbals as CEO of TerraForm Power.
Oppenheimer downgraded SunEdison to Perform from Outperform on Tuesday, citing an "unclear liquidity picture and questions about financial controls." According to analysts surveyed by Bloomberg, the company has seven Buy ratings, eight Hold ratings, and one Sell rating.
Bearish activity for SunEdison increased this week after David Tepper's Appaloosa Management announced that it was seeking an expedited trial against SunEdison in an effort to block its acquisition of Vivint Solar (VLSR). Appaloosa Managment, which holds a 9.5% stake in TerraForm Power, filed suit against SunEdison on the grounds that the transaction was unfair to TerraForm Power as it would require TerraForm to acquire Vivint's "less desirable residential" project under a take-or-pay arrangement, according to court documents. Last week ,a Delaware Court denied a preliminary injunction on the transaction but left open the possibility of the case going to trial.
"We're going to continue on," Tepper told Real Money in a phone call on Tuesday. "We don't just do things to do things."
Last week, Tepper told Real Money he was awaiting the transcript of Judge Andre Bouchard's ruling -- which was delivered from the bench on Thursday -- before deciding how to proceed.
The transcript shows Judge Bouchard denied the injunction order, saying that it was not proven that TerraForm Power faced "imminent irreparable harm" from the transaction. Although the injunction was denied, Judge Bouchard said he had serious questions about the transaction and left open the possibility of an expedited trial.
In his closing remarks, Judge Bouchard addressed concerns about the fairness of the SunEdison-Vivint transaction, the independence of the conflicts committee of TerraForm Power's board, and the economic fairness of the transaction.
This battle is just heating up.
