Sunedison Inc (OTCMKTS:SUNEQ) shares slid 3.85% to $0.125 on Thursday and were flat in after-hours trading. The company has a market cap of $39.62 million at 316.94 million shares outstanding. Share prices have been trading in a 52-week range of $0.04 to $6.88, which represents tremendous downside off the highs.
Investors have been speculating on a merger between Sunedison Inc and Terraform Power for quite some time, as the company’s Unsecured Creditor Committee seeks to invoke Claw Back Provision against Terraform Power and Terraform Global. Both companies have been assessed as undervalued a few months back, with Sunedison Inc struggling to show creditors to prove that its assets have greater value than its short-term debt.
In early October, Creditors’ Committee demanded that debtors immediately prosecute the Proposed Claims on behalf of the estates or grant the Creditors’ Committee standing to do so. However, Sunedison Inc refused these demands, prompting the Committee to the original Patrick Cook statements, which was the basis of the company’s stance that they were accepted at face value by Judge Bernstein when he denied the formation of an Equity Committee.
In response, Terraform published a presentation that did not address the possibility of a claw back. “TERP will consider strategic alternatives that do not require a settlement with SUNE or SUNE stockholder approval. TERP proposes settlement where proceeds are allocated ratably among all stockholders,” it indicated. Sunedison Inc followed up with their own statement, citing that it remains committed to continue to work in good faith with Terraform as both entities explore strategic alternatives and will continue to do so during the pendency of any settlement negotiations.
Even so, both companies saw massive declines in market value in the past few weeks, prompting investors to speculate that a merger might make more sense at this point. Shareholders hope that Sunedison Inc can sell its 48.2 million shares in TERP and 63.3 million shares in GLBL for their former values. To do so, it must first file a motion in bankruptcy court. Investors also fear an imminent delisting, which could further weigh on share prices in the coming weeks.
With these updates, it’s hard to imagine any upside for Sunedison Inc stock, more so for Terraform Power and Terraform Global. Investor interest in renewable energy companies has been on the back burner for the time being as other industries, such as medical and recreational marijuana, have been pointing to stronger returns.
Sunedison Inc is a renewable energy development company that develops, finances, installs, owns and operates renewable power plants, and delivers electricity to its residential, commercial, government and utility customers. It provides customers with asset management, operations and maintenance, monitoring and reporting services.
The company’s asset management services include billing and reporting, finance and accounting, tax and audit services, vendor management and warranty claims management. It also maintains a database of system performance and product information for its own products, as well as third-party components. Its SunEdison Connect is a Web-based software application that gives access to data and services via an online monitoring portal.