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And your source for this BOA info is? Don't say it is Stephen Miller (or reports thereto) because the Court has already ruled adversely on all of Mr. Miller's Court filings.
Would somebody please post an authoritative source from the SUNEQ Court or an another participant' that says cash flows are exceeding projections!
Tesla has been living on promises upon which it has NEVER delivered. HOW LONG DO YOU THINK IT WILL LAST?
Show me. Otherwise your opinion is as valid as an opinion on any other bankrupt company with negative cash flows!
Which projects are you referring to? Stalking Horse #1?. Stalking Horse #2? How many megawatts under construction are you referring to? How many projects (i.e. megawatts) are you planning on getting "premium" pricing? The "Real" information is in the details. I follow the permitting process on a project-by-project basis. Where do you get your intel?
IMO, SUNE is now under a severe cash crunch and is hanging on by a thread. On 10/17, not less than 13 firms (legal, accountancy and financial advisory critical to the bankruptcy resolution process) filed with the Court requesting that they had not been paid in full thru August 31st and wanted their services paid in accordance with rules as agreed by the Court at the inception of bankruptcy. Given the large number of waiver filings before the Court filed over the last two months, the projected cash flows for SUNE will not only not be met but those firms essential to a smooth resolution of the bankruptcy process for the sale of all assets, is now in jeopardy due to non-payment for services rendered to achieve the stated objective. It is not in the interests of the DIP Lenders to alienate individually, or collectively, those firms whose cooperation they need, to get paid in full. Despite numerous postings, current or deleted, expressing a contra-view, SUNEQ is in a very precarious position at present and may not survive Ch. 11.
How is this Bloomberg report now germane to SUNE? SUNE sold ALL of its India assets to Greenko for $32MM in cash and the assumption of debt after the yieldcos waived any claims to the assets. Included in the sale was 1,000 MW of undeveloped solar projects that SUNE gave away for free.
http://economictimes.indiatimes.com/industry/energy/power/greenko-to-buy-sunedisons-indian-portfolio-for-315-million/articleshow/54399740.cms
The Stalking Horse procedures, as described to the Court, offered packaged projects arranged by geography to "the highest bidder". The Stalking Horse procedures also required SUNE to offer those same packages a second time in an auction process to "the highest bidder" taken as a whole. The "highest bidder" was defined in the documents as the highest cash price to SUNE. 93% of the April 2 +5,000 MW portfolio is now committed to for sale. "Selected buyers"? "Complex agreements"? Utter nonsense. The DIP lenders are looking solely for the most cash which comes from the sale of the most viable/profitable businesses and projects. The only ignorance here is the failure of some to read the Court documents then make statements which have no factual basis.
Not so fast! There is about $500MM from the Stalking Horse deals that should come in over the next 4-6 weeks. However, since it takes 53-54 days to produce a cash flow report, i.e. MOR, that could be produced in 24 hours, you won't know about their cash position until January 2017. The insiders, i.e. DIP lenders, hold all the cards and control where SUNE ends up. The contracts for the CEO and CFO are scheduled to expire at the end of October. Assuming they get paid all monies due before then, they could be retained to close out any scheduled sales. If the expected cash comes in as forecast this could be extended for many more months as the DIP lenders seek the monetization of the yieldcos. On the other hand, this whole situation could also collapse when the cash runs out earlier than expected.
The Longs don't follow the actual financials. They may read them but they are faith based. If there is even a glimmer of hope that SUNE can survive then their optimism is justified in their minds. Without any info on the repayment of the DIP debt, it is very likely that they do not get paid in full based on current available financial data. Heads are going to roll if it comes up short. The unpaid post-bankruptcy creditors will be screaming from the roof tops when they don't get paid. Lot's of side deals are likely in the works. This is a historic bankruptcy unfolding before our eyes.
Forgive the Longs for their optimism. In 99.9% of cases (IMO) there is some basis for believing that a company can resurrect itself. However, SUNE is a clear case, based on both the information available and the opinions of the experts at hand, that SUNE has no value, has no cash flow and has no future. All the MOR’s and Stalking Horse bids with no auction premiums corroborate those opinions. They are selling off all the low hanging fruit with the best cash flows. The reasons for SUNE’s demise will be made clear in the post-scripts. It was a house of cards that relied on debt without supportive cash flows and when new debt dried up they collapsed. They even put their scam on GLBL for $321MM when third party lenders said no more. There is no opportunity to develop new green energy projects without boatloads of cash. SUNE burned all of its new money bridges. It will never get new cash again. End of story.
The Court Docket link is: https://cases.primeclerk.com/sunedison/Home-DocketInfo
It runs in reverse chronological order with the most recent at the top. It is my first read of the day and I have read ALL filings since day 1. Stephen Miller is my most favorite author.
The last MOR is Docket #1395. The important pages are #3, the most current cash inflows and outflows, and pages 15-21, the cumulative results since filing. Ignore the Balance Sheet. It is a concoction and is strictly qualified in the CFO's introduction as "non-GAAP".
The last important page for reading into SUNE's disastrous condition is page #29. They have not paid any new creditors since their filing, and consequently have racked up $803MM in new liabilities.
Too funny. Six firms engaged since bankruptcy filed with the court today applying for payment for services rendered for which they have not been paid and they had previously billed. SUNE has racked up cumulative Net Sales of only $121MM since filing yet they have accumulated $800MM in unpaid obligations. SUNE as of their August MOR only had $116MM in cash. Club 33, where's the beef?
Strike 2 1/2. Stalking Horse bid number three received no bids at auction (Docket #1406). No premiums. No bonuses. The solar materials business in its entirety will be sold at the original price of $150MM with $50MM subject to meeting post closing benchmarks (i.e. ALL SOLAR patents, technology and manufacturing is going out the door). To date, the four Stalking Horse bids have attracted less than $500MM in bids. The Stalking Horse India deal is still in process. The only card SUNE has left to play are the yieldcos. They will get packaged under a restructuring with new stock because the DIP lenders can't sell the shares directly. Look for a big hit to the yieldcos share prices.
It won't. This is a company that can't shoot straight and neither can its yieldcos. GLBL announced two new Board Members today and one was the former CEO of Kenetech, a/k/a U.S. Windpower, a high flying wind developer in the 80s and 90s until rapid growth and out of control debt resulted in bankruptcy followed by liquidation. Why hire a guy who was intimately involved in doing the same thing as SUNE management? There are many in this renewables development industry who are great at separating people from their money but they don't know how to run a business.
MOR = Bankruptcy Monthly Operating Report filed with the Court #1395 https://cases.primeclerk.com/sunedison/Home-DocketInfo
The "party" reference is sarcasm. SUNE burns thru cash now as they did before bankruptcy. Only now it is done to permanently liquidate assets.
The August MOR is in. More of the same. Net loss for month of $116 million and Cash dropped another $54 million leaving $116 million. SUNE sure knows how to party.
Somehow, I don't see how the author of your quote (blogger Joshua Rodriguez) is qualified to assess SUNE's bankruptcy chances given that his previous popular articles include "How to have a Great Date for less than $50" or "How to Save Money When You're Eating Well". He cites the "40%" without any references and makes no mention of SUNE's ongoing cash flow difficulties. SUNE's chances in bankruptcy are tied to the monetization of its assets and right now those sales are not looking to good.
I couldn't find anything to support the 40% number but I did find the following article: http://www.fool.com/investing/general/2016/02/23/what-a-corporate-bankruptcy-means-for-shareholders.aspx
Even if your 40% figure is FACT, not all such bankruptcy settlements give monies to post-filing commons. Enron common holders only got paid from proceeds from lawsuits filed against the investment bankers and accountants and only the commons "of record prior to bankruptcy" got paid.
Does anybody follow SUNE’s yieldcos? I thought the yieldcos were supposed to be cash cows. In TERP’s 8-K filings that summarize financial data in 2016 they stated that they had Net Losses for each of the first two quarters. They reported an Unrestricted Cash Balance of $450 million on August 31st but have drawn down $655 million under their revolver meaning all of their cash belongs to the banks. Is SUNE stalling on the yieldcos 10Q filings in order to keep the public in the dark on their deteriorating condition? If SUNE can't monetize sufficient value from disposition of the yieldcos to repay the DIP lenders in full where does that leave SUNE?
I didn't say "IPO". I said public offering. On a consolidated basis, TERP issued 18 million new shares and gave all the cash ($667MM) to SUNE in June. SUNE in turn is the guarantor of TERP's revolver which is why SUNE has pledged all of its shares in TERP to the DIP lenders. Whether SUNE or TERP issued the new shares is a distinction without a difference.
Thanks for the comment. I figured out the non-research part a few weeks ago. I am still trying to figure out the psychology behind the vehement support for a company where all available financial and operating data says its over. Maybe over-exposure to too many Hollywood endings?
Case study research of how a $20 billion company goes bankrupt in less than a year after a public offering.
Since you know so much about SUNE please specify what will be left of the Company after the 5 Stalking Horse deals are closed? How many unsold finished projects are on the books and where? How many projects in the development pipeline and where? What other profitable operating business segments and businesses are still left? Where is all this information coming from? I have gone through every Docket filing since the filing inception and can find no data to affirm your assertions.
SUNE is currently prohibited from an outright sale of the Class B shares in the yieldcos in accordance with the terms of the share issuance. As the yieldcos' commons holders have already discovered, without the voting power of the Class B shares investing in commons means taking financial risks without any say in company operations. The DIP lenders can't sell the SUNE yieldco's shares unless re-packaged in a restructuring.
The yieldcos are heavy baggage. They are bleeding red ink. ALL of TERP's Unrestricted Free Cash is borrowed under their revolver. The interest rates for their 2023/2025 bonds just got increased 50 basis points permanently and an additional 300 basis points until they produce audited financials. And they are moving from the high PPA priced solar season into the lower priced PPA wind season which will reduce quarterly revenues. A merger would help neither SUNE or the yieldcos which needs to get their houses in order before they end up like SUNE.
Based on my review of TERP’s March 2015 IPO, SUNE cannot dispose of its ownership of the Class B shares until the earlier of the IPO three-year anniversary date (March 2018) or TERP’s payment of 4 consecutive quarters of premium dividends plus all arrearages (not going to happen). Since SUNE pledged all of its Class B shares to the secured lenders, the lenders will not be able to monetize the value of those shares via SUNE’s outright sale (without a huge discount to the market price). Therefore, it is most likely, IMO, that SUNE gets reorganized as a going concern with the sole function of owning the yieldcos’ shares, the company is recapitalized as a private company with the DIP lenders as the sole owners, and the new owners will have to rely on any periodic repayments until they are able to sell their ownership of the new SUNE when the Class B Shares Subordination Period lapses.
Not offended by belief in survival if based on sound factual basis and business fundamentals. I have not seen it yet but I have seen a lot of knee jerk reactions to press reports which have added nothing beyond what has been revealed in the Court docket. It is all wishful thinking so far.
What deal? The only transactions that have been approved by the Court are the Stalking Horse proposals. That leaves SUNE woefully short of the cash to fully take out the DIP lenders and the post-petition creditors which as of the end of July was up to $767MM.
DIP lenders do not negotiate hair cuts. Ever! A Moody's study of 297 bankruptcy cases involving DIP debt showed only two defaults with only one case where a DIP lender lost money (Winstar Communications was liquidated). All the other cases showed full payouts to the DIP lenders. Prior to 2005, DIP debtors could get repeated extensions for filing reorganization plans which could go on for years. In 2005 the law was changed to prohibit any extensions for reorganization that was beyond 18 months from the filing date. After that the DIP lenders lose their exclusivity of superior secured creditors. SUNE's DIP lenders are going to angle for a full payout even if it means a SUNE liquidation.
Never have so many paid so much for so little...except when SUNE went on its feckless buying spree.
Simple explanation: A Bloomberg report that SUNE was considering a restructuring plan that might include retaining ownership of the yieldcos got twisted by SA's Karl Surran into they "were" planning on retaining the yieldcos. The Longs reacted with huge buys driving up the stock price for the day. A more somber assessment of the "restructuring" report is in today's SA's Henrik Alex report. http://seekingalpha.com/article/4010743-sunedisons-shares-80-percent-reorganization-reports-investors-care
It seems the market got excited today when Bloomberg reported anonymously that SUNE was looking into a restructuring plan that included the option of holding onto the yieldcos. Just remember that the DIP secured lenders hold all the cards and the SEC website has advice for such bankruptcy circumstances:
“Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.”
The notion that SUNE may emerge from bankruptcy restructured and/or has hidden assets is absurd. My review of the MOR’s thru July show cumulative Net Sales of $158MM, a Gross Loss of $638MM and new Unpaid Liabilities of $767MM. The only assets on SUNE’s books, whether in or out of the Court’s domain, that have any real value are those that generate Net Sales or cash flow. SUNE has to report all of it to the Court. The four Stalking Horse deals and the India deal are only going to generate $474MM in gross cash. That leaves a deficit of cash of almost $293MM and SUNE’s monthly losses are growing by the month. Since filing for bankruptcy SUNE has only dug a deeper whole of debt. The only card SUNE has left to play of any real value is the sale of TERP and GLBL.
It looks like the newspapers' financial writer is out sick today so they gave the kid intern in the Home & Family section a shot at filling in the financial section's empty space. There is only so much you can research with Google on such short notice.
Mr. Miller is indeed a prolific lawsuit filer. In June he filed an action against a number of defendants for crimes against society to which he would settle for $49.9 BILLION. https://www.facebook.com/ms.terrymcmillan/posts/10153668868427091
So when you said (#27953) "The new CFO was given a large chunk of shares as a bonus when he was hired, why would SUNEQ give him worthless shares, that makes absolutely no sense" you were referring to Daskal (the new CFO) and not Philip Gund (the new "new" CFO)?
I assume you are referring to Ilan Daskal who was hired 1 month before bankruptcy and was out two months after bankruptcy. I suspect that he had no idea (given no SEC filings) how bad a shape SUNE was in when he was hired. It doesn't take much to figure out that most of your compensation is worthless when in a bankruptcy.
SUNE has done a lot of senseless stuff so enticing a new CFO with stock they knew to be worthless is consistent with their other aberrant behavior.
If you haven't noticed the new CEO and CFO are compensated all cash with monthly retainers, payable in advance, and they get big bonuses, all cash, if they hit their objectives before the end of October.