Energy

‘Hopelessly Insolvent’ Obama-Backed Solar Company On Verge Of Extinction

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Chris White Tech Reporter

Solar company SunEdison is on the verge of complete collapse, as the company was forced to stiff shareholders as its debts outweigh assets by at least $1 billion.

The company is “hopelessly insolvent,” Judge Stuart Bernstein said in a Thursday decision announcing SunEdison’s shareholders won’t get an official voice in the bankruptcy.

The judge’s decision came after a court fight aimed at showing the massive solar power company had enough money left to keep shareholders from avoiding financial ruin as a result of the bankruptcy.

Shareholders “have lost money on their investments, and hope that an official committee will capture value for them in the end. The appointment of an Equity Committee, however, will not create value where it does not exist,” Bernstein said.

SunEdison will come up nearly $1 billion to $2.5 billion short of covering all of its debts, the judge said, making it “substantially unlikely” shareholders will avoid significant financial pain.

The company’s market capitalization nosedived in 2015 and 2016, as investors and business partners lost confidence amid mounting debt, incomplete deals and doubts about the company’s finances.

The solar panel provider’s descent into insolvency was quick and devastating. SunEdison’s shares tumbled nearly 100 percent (95 percent) during the past year, and the company’s market value fell from a high of $10 billion in July 2015 to around $400 million as of March 2016.

SunEdison and its sister companies received nearly $650 million in government subsidies and tax credits since 2000, according to a Good Jobs First report in March, making it the 13th most subsidized company in the U.S.

Additionally, the Obama-backed company benefited from an infusion of $4.6 million in subsidies from the Department of Energy and Department of Treasury. Watchdog.org reported in 2015 SunEdison raked in millions of dollars from the Obama administration.

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