US solar energy company SunEdison Inc , whose aggressive acquisition strategy has saddled it with almost $12 billion of debt, is at "substantial risk" of bankruptcy, one of its two publicly listed units warned on Tuesday.
A bankruptcy would rank among the largest involving a non-financial company in the past 10 years, according to bankruptcy data.com. SunEdison declined to comment.
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SunEdison's shares - already reeling from a Wall Street Journal report on Monday that the company was being investigated for overstating its cash position - fell as much as 60 per cent to a record low of 50 cents.
TerraForm Global Inc, one of two SunEdison "yieldcos", said in a regulatory filing that it would join its parent and fellow yieldco TerraForm Power Inc in delaying its annual report for the year ended December 31. However, the company said it did not rely substantially on SunEdison for funding or liquidity and that it would have sufficient liquidity to support its operations even if its parent sought bankruptcy protection. TerraForm Global's annual report was due by March 30.
Yieldcos are publicly traded subsidiaries that hold renewable energy assets, including assets bought from their parents. They are backed by long-term power purchase contracts with utilities, allowing them to pay regular dividends.
TerraForm Global, whose shares fell as much as 23 percent to a record low of $1.92, said SunEdison may not transfer to it some solar energy projects in India, for which TerraForm Global has paid $231 million, and also may not complete other deals.
"If SunEdison does not perform under these agreements, it could have a material adverse effect on TerraForm Global," TerraForm Global said.
TerraForm Global's chief executive, Brian Wuebbels, is also SunEdison's chief financial officer.
