'Nothing to see here, move along' is the message from embattled once-hedge-fund-darling SunEdison following its Valeant-esque self-investigation. Despite finding 'wrongdoing' by a former employee in talks over a failed acquisition and that its own executives fostered an "overly optimistic culture," SUNE officials found no misstatements in financial statements. The stocks is 75% higher in the pre-market on this 'good' news (remember BTU?). However, despite the kinda sorta wrongdoing, Bloomberg reports the renewable-energy company already teetering on the brink of bankruptcy, missed a bond payment this month.
As Bloomberg reports,
Counsel retained by SunEdison Inc. found wrongdoing by a former employee in talks over a failed acquisition and that its own executives fostered an “overly optimistic culture” that came from the top of the organization, according to a regulatory filing.
The world’s worst-performing and biggest renewable-energy developer said it will remedy the situation with tighter financial controls and with the appointment of a new Chief Financial Officer, Ilan Daskal, who started work on April 4 after Brian Wuebbels departed the position. Shares of SunEdison rose as much as 54 percent to 57 cents in pre-market trading in New York after closing at 37 cents on Wednesday.
SunEdison’s independent directors, according to the filing, identified “wrongdoing” by a former non-executive employee “in connection with negotiations over the termination of the Vivint Solar Inc. acquisition.”
The $1.9 billion Vivint acquisition was scrapped in March after SunEdison missed deadlines. It was canceled shortly after SunEdison initially revealed that it was delaying the filing of its 2015 annual report to address, in part, an internal inquiry into its accounting.
The delay along with concerns about its mounting debt load have raised questions among analysts about SunEdison’s ability to remain solvent. SunEdison amassed $11.7 billion in debt as of Sept. 30, and is facing technical defaults on at least $1.4 billion in loans and credit facilities because of its failure to file the 2015 report.
But, according to its leats 8-K, SunEdison found no misstatements in financiall statements:
The Independent Directors have determined that as of the date of the independent counsel report, there were no identified material misstatements in the Company’s historical financial statements as well as no substantial evidence to support a finding of fraud or willful misconduct of management.
However, the company was supposed to pay $2.6 million April 1 on its 2 percent convertible bonds, which are due in 2018, according to data compiled by Bloomberg. SunEdison has a grace period through May 1.
The trustee, Wilmington Trust Corp., confirmed April 11 that the payment was missed, according to data compiled by Bloomberg.
Not making the payment “means SunEdison is likely in technical default,” Greg Jones, an analyst at CreditSights, said in an e-mail Wednesday. Failure to cure by May 1 “could potentially trigger cross-default provisions in other debt obligations.”
About $256 million remains on the bonds. They were issued in December 2013 and are currently trading at about 9 cents on the dollar.
Ben Harborne, a SunEdison spokesman, declined to comment Wednesday. A spokesman for Wilmington Trust didn’t immediately return a call seeking comment.
SunEdison is already facing technical defaults on at least $1.4 billion in loans and credit facilities because of its failure to file its 2015 annual report. The company amassed $11.7 billion in debt by Sept. 30, and now faces inquiries into its financial status from an internal audit committee, the U.S. Department of Justice and the U.S. Securities and Exchange Commission.
And so – a default, some "just the tip" wrongdoing, and so – SUNE is up 75% in the pre-market….
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