In last trading session, the stock price of Sunedison Inc (OTCMKTS:SUNEQ) declined 0.42% to close the day at $0.237. The decline came at a share volume of 115.07 million compared to average share volume of 71.62 million.
Sunedison, which filed for bankruptcy protection on April 21, intends to sell its 2 energy projects in Chile to Colbun for an undisclosed amount. The renewable energy company filed for Chapter 11 after a short-lived debt-fueled acquisitions spree proved unsustainable. The new deal highlights the deal of two solar energy unis that are being advanced on Chile’s SIC power grid.
Sunedison also finalized a 15-year power-supply deal with Colbun for supplying the Chilean energy firm with 200 gigawatt hours annually. The company intends to develop a 100 megawatt solar plant based in Chile to fulfill the goal. The companies didn’t reveal the amounts for the transactions and contracts.
The solar power firm has been facing a tremendously hard time in industry recently, and for a strong reason. Sunedison is drown deep into debt and has now entered into the first stage of bankruptcy. However, here it is important to analyze and see if there is still any hope left for investors. The company boasts an interesting business model. It develops massive solar power plant, and to profit from them, it signs power purchase deals with utility firms.
There is a large upfront cost linked with building power plants, and to meet them Sunedison had to take debt form market. While things are appearing devastatingly bad at this time, there remains a bit of hope for investors.
The court recently approved the company a substantial amount in Debtor in Possession financing. It would help Sunedison to be cash-flow positive at least for this year. Historically analyzing, bankruptcy doesn’t always indicate that investors will lose their money. In fact, viable firms that have sought for bankruptcy to avoid legal ramifications compensated stockholders nearly 40% of the time.