SunEdison Falls a Second Day Amid Concern on Financing Talks

  • Company in negotiation for $650 million in potential funding
  • Analyst raises concern that it could cause share dilution

SunEdison Inc. fell for a second day after an analyst raised concern that negotiations over about $650 million in financing could dilute the value of existing shares.

The world’s biggest renewable-energy developer fell 8.6 percent to $5.02 a share at the close of trading in New York after dropping 7.3 percent on Monday. That’s the biggest two-day loss for SunEdison in three weeks. The shares rose 9.8 percent when debt talks were disclosed in a regulatory filing on Dec. 24.

“While the shares have rallied on positive liquidity datapoints, we still see equity solvency as challenged,” Julien Dumoulin-Smith, an analyst at UBS who has a sell rating on the stock, said in a research note on Monday. “While a warrant would not be unusual, management’s disclosure is unclear about form or magnitude.”

SunEdison has been in talks about potential funding since Dec. 10, including discussions about a second lien worth as much as $650 million. The refinancing could include “a significant amount” of SunEdison’s outstanding equity, according to the filing.

The company’s shares have seen big swings since July, when Chief Executive Officer Ahmad Chatila announced plans to buy residential solar installer Vivint Solar Inc. and sell shares in a holding company, TerraForm Global Inc.

The delayed Vivint deal, initially pegged at $2.2 billion, was renegotiated at a lower price this month after hedge fund billionaire David Tepper acquired a 9.5 percent stake in SunEdison’s TerraForm Power Inc. and complained about the acquisition in a letter to management.

A call and e-mail to a SunEdison spokesman weren’t immediately returned.

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