If SunEdison (SUNE) continues to delay releasing audited financial statements for 2015, it could find itself in technical default on just over $1.4 billion in debt.
On Wednesday, Bloomberg News reported that two of SunEdison's credit facilities contain covenants that require the company to release audited financials within 90 days of the end of 2015. The company is granted a 15-day grace period on the breach of that covenant before failure to file is considered an "event of default."
The credit facilities mentioned in Bloomberg's report were addressed by a Debtwire story on Tuesday. Representatives from SunEdison have not responded to Real Money's requests to comment.
Debtwire reported, citing sources familiar with the matter, that SunEdison was in talks with holders of its $725 million second-lien credit facility to fund a debtor-in-possession facility, which could provide the troubled Missouri-based solar company with $300 million in "post-petition" liquidity. (Debtor-in-possession facilities are typically put into play to help a distressed company receive the financing needed in a restructuring process. The debt often comes with strict terms for the borrower and is often held senior to existing debt.)
Terms of the second-lien credit facility also stipulate that SunEdison's financials cannot have a "going concern" or similar qualification.
Both the Bloomberg and Debtwire reports also addressed SunEdison's first-lien credit facility in which it has $716 million in letters of credit outstanding. The talks, Debtwire wrote, came after the lenders and SunEdison were unable to reach an out-of-court solution to address its liquidity and leverage problems.
SunEdison has delayed the release of its financials twice so far, citing "material weaknesses" in its internal controls after it failed to file by March 15. At the end of February it said, via a filing with the Securities and Exchange Commission, that it had to delay filing due to an ongoing investigation stemming from allegations made by a former executives about the accuracy of the company's financial reporting.
At the time of the February filing, SunEdison said that it found no "wrongdoing based on the former executives' allegations."
