SunEdison, Facing More Legal Woes, Plunges to 14-Year Low

  • Company faces hearing next week about $1.9 billion Vivint deal
  • Judge issued restraining order Thursday on Latin America suit

SunEdison Inc., the worst performing renewable-energy company in the past year, fell to a 14-year low as it contends with two legal disputes.

On Tuesday it will face a hearing to defend its planned $1.9 billion acquisition of Vivint Solar Inc. And yesterday, a judge ordered it to refrain from shifting some assets during a lawsuit over a failed acquisition in Latin America.

That’s dragging down the world’s biggest clean-energy developer’s already battered shares. SunEdison slumped 31 percent to $1.41 at the close in New York, the lowest since September 2001. The company has plunged 93 percent in the past year, the most on the WilderHill New Energy Global Innovation index of 104 members.

“There’s a lot of negative headwinds they face today,” Carter Driscoll, an analyst at Friedman Billings & Ramsey Co. in New York, said in an interview Friday.

Vivint Hearing

The bigger legal issue is the Vivint deal, said Jeffrey Osborne, an analyst at Cowen & Co. SunEdison announced plans in July to buy the rooftop solar company. The transaction prompted significant criticism from investors, including billionaire hedge-fund manager David Tepper. His Appaloosa Management LP suedlast month to block a key part of the purchase, and a judge in Delaware is scheduled to hear the case Tuesday. U.S. markets are closed Monday for a holiday.

Appaloosa said in December it acquired a 9.5 percent stake in TerraForm Power Inc., a holding company controlled by SunEdison that’s planning to buy some of the Vivint assets as part of the deal. Tepper is seeking to block that component of the transaction.

“It’s the last trading day before the hearing,” said Osborne. “People are assuming the worst.”

A second legal issue emerged this week. SunEdison was temporarily blocked Thursday from transferring some assets while shareholders of Latin America Power BV seek more than $150 million in damages. SunEdison agreed to buy the company in May from Brazil’s BTG Pactual Asset Management and its partners, and canceled the deal less than five months later, contending that the sellers failed to satisfy certain conditions.

Ben Harborne, a SunEdison spokesman, said in an e-mailed statement Thursday after the judge’s ruling, that the company “can continue to conduct our business without undue interference.” That includes selling its power plants at fair value, he said in an interview Friday.

The Latin America Power lawsuit is “potentially another claim on the cash flow,” Driscoll said.

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