businesstrade.jpg

SunEdison Green Power Bankruptcy Inevitability

$
Daily Business Report
M A R K E T S
Mercantile
Article Archives
US Economic Forecast for 2012 and the Election Year Cycle
Shop the Local Merchant Economy
Right to Work vs Union State Economies
Rational Tariffs Lower Irrational Trade Deficits
International Business - Davos Style
Banking, Housing and Mortgages
David Stockman's Viewpoint on the Obama Budget Disaster
Regulations Harm Small Business and Protects Corporations
Gas Prices as an Indicator of Energy Costs
Governments Acting as Venture Capitalists
College Education Economics
Industrial Wind and the Production Tax Credit
Medicare and the Ryan Budget
U.S. Corporate Tax Rate Consequences
Corporate Spying and Intellectual Theft
The Foolish Exporting Natural Gas Policy
A Matter of Time for a VAT Tax
Big vs Small Bank Loans
Bankruptcy Trends in the Post Meltdown Era
Money Center Banks and Stricter Financial Oversight
Electric Power Generation under NYS Article X
Growth in the National Debt
Advantages of Chinese Trade Policy
Unemployment as a Lifestyle
Immigration Hurts American Employment
Bank for International Settlements on Big Banks
Small Business Assault from Obamacare
Compound Interest and the Debt Bubble
The Federal Centralization Economy
Parking Offshore Profits Hurt the Domestic Economy
The Record of Olympic Economics
Financial Algorithmic Trading
Goldman Sachs Above the Law
The MF Global Magical Mystery Tour
Destroying Internet Freedom by Taxation
The Permanent Unemployment Economy
Jackals of Jekyll Island - Federal Reserve Audit
QE3 Blowing Up the Debt Bubble
Riots Over Rotten Apple Mania
Gap Between College Costs and Inflation
Counterproductive Minimum Wage Mandates
Derivative Meltdown and Dollar Collapse
Central Banks Game Plan: One World Currency
European Commission Single Supervisory Mechanism
Lunacy of FEMA Hurricane Insurance Subsidy
Taxmageddon Holding Hands while Jumping Off the Cliff
The Direction of Equities in the Obama Economy
Is it FAIR to Tax the Rich out of Business?
California Dreaming: Bankruptcy, Pensions and Taxes
Pay Differential - Private Sector and Federal Government
Long History of HSBC Money Laundering
Swan Dive of 2013 Economy
Federal Reserve May Pause Quantitative Easing
The Economics of Sequestration
The state-owned Bank of North Dakota
Chinese Takeover with Free Trade Zones
Low Interest Rates Impoverish Savers
Bond Bubble Expectations
Currency Wars - Race to the Bottom
Government Subsidizes and Bankrupt Companies
Economics of Gun Control
Refuse to Buy or Sell with the Federal Government
The Cyprus Great Bank Robbery
Keystone Pipeline Blockage
Move Over IMF for the BRICS Development Bank
Obama Budget Proposes Cuts to Social Security and Medicare
The Risk and Reward of Bitcoins
Farm Supports and Social Welfare
Internet and Sale Taxes Dialectic
The Warren Buffett House of Cards
IRS as a Political Hit Squad
Revenue Budget Projections
Google and the NSA Connection
The Roubini - Faber Debate
Hydrofracking Boom or Bust
Goldman Sachs - first learn, then earn and serve
The Federal Reserve after Ben Bernanke
Implications of a Pyrrhic Real Estate Rebound
The New Normal: Part-Time Employmentyment
U.S. & Europe Trade Deal Honeymoon
Detroit City Bankruptcy Blues
J P Morgan and Commodity Manipulation
Strange Business Success Ventures
Business of Evangelism Religion
NFL Marketing Machine
Privacy Gone on Offshore Assets
Chinese Banks Quasi Government Institutions
Forecasts of a Doomed Economy
Financial Meltdown Five Years After
Corporate Profits and Worker Unemployment
Renminbi Soon to Be a Reserve Currency
Rehypothecation of Collateral
IMF Proposal to Tax Bank Deposits
Transfers excluded, JP Morgan Chase is Wired
Insurance Companies Profit from Obamacare
Climate Change by Executive Order
Economics of Non-governmental Organizations
Why Business Franchising is a Bad Deal
The Business of the Christmas Season
China Becomes Largest Trading Nation
Obamacare as a Jobs Killer
Does a 100 Trillion Debt Total Matter?
Underground Commerce is the Real Economy
Technology and the Future of Jobs
The Japanese Debt Economy
Individual Wealth in Perspective
Inevitability of Financial Bubbles
Russian Sanctions Backfire
Is the Dollar and Equities Ready to Crash?
Economic Reality of a Wealth Tax
How stable is the Bond Market?
Are International Stocks Safer than U.S. Equities?
David A. Stockman - The Great Deformation
Chinese and Japanese Deflationary Economies
Euro Crisis Deepens
Russia's SWIFT Settlement Alternative
The Swiss will not have more EU QE
Business of Global Warming Fraud
Economics of NYS Southern Tier Secession
Fear of IRS Tax Audits Diminish
Where is Global Economic Growth?
Government's share of minimum wage increase
Economic Growth Is Impossible
Replace the Business Cycle with Permanent Poverty
Who benefits from the lifting of Iranian sanctions?
Who Wins in a Currency Devaluation War?
Labor Day when there is no work
Municipal Bankruptcies and more on the way
Undeniable Social Security Demographics
Grinch that stole Christmass
Business Mergers Soar in 2015
The Chinese Market Crash
Driverless Vehicles Powered by Artificial Intelligence
U.S. Banks Ready for Negative Interest Rates?
International Trade Sinks with the Baltic Dry Index
SunEdison Green Power Bankruptcy Inevitability
Another Record Collection from Federal Taxes
BREAKING ALL THE RULES
BREAKING ALL THE RULES Forum
BATR Index
hub
Corporatocracy
Forbidden History
Reign of Terror
Stuck on Stupid
Totalitarian Collectivism
Global Gulag
Inherent Autonomy
Radical Reactionary
Strappado Wrack
View from the Mount
Solitary Purdah
Dueling Twins
Varying Verity
911 War of Terror
HOPE

SunEdison Inc (NYSE:SUNE) stock collapsed more than 50% in a dramatic fashion on Tuesday, as a potential bankruptcy filing is closing in on the renewable energy developer. The US Securities and Exchange Commission (SEC) is looking into its liquidity disclosures, The Wall Street Journal reported on Monday, before TerraForm Global – one of SunEdison’s yieldcos – said there is “substantial risk” the parent company could file for bankruptcy.

SunEdisonlogo.jpg

bankruptcy.jpg

 

SunEdison Green Power Bankruptcy Inevitability

For all those sun baked brains that see salvation in renewable nirvana, the imminent demise of SunEdison is the latest case that creative green economics is the path to insolvency. After studying the tangled web of cross collateralization and rehypothecation of debt, the WSJ announcement is inevitable, SunEdison Said to Be Preparing to File for Bankruptcy. “Solar-energy company SunEdison Inc. plans to file for bankruptcy protection in coming weeks, a dramatic about-face for a company whose market value stood at nearly $10 billion in July.”

Take the tour of the SunEdison: A Timeline of the Biggest Corporate Implosion in US Solar History, and understand that the solar and wind industry is founded on a Ponzi scheme of investor hype and government subsidies.  Forbes investigates the convoluted and intertwined relationship in Reconsidering The SunEdison YieldCos, TerraForm Power And TerraForm Global.

“The company has been highly levered for some years now and management states that the recent increase in indebtedness will go towards funding of the company’s project pipeline.

Management expects the company to continue to lose money. However, it expects the cash generated by the two yieldcos under long-term contracts will begin to flow as early as the end of this year or beginning next year.”

At this point you must be asking just what is a ”yieldco”? Sun Edison Buying First Wind Scam provides a breakdown and crash course on how SunEdison used their corporate shell game to acquire a long failed and immensely indebted industrial wind scheme, lately known as First Wind.

“The lack of disclosure of ALL the debt for projects that cannot even satisfy minimum interest payments must less retiring the actual obligations, is indicative of an industry that is based upon fraud and uncompetitive costs.”

According to Law 360 the Nov. 2014: SunEdison and TerraForm acquire wind developer First Wind for $2.4 billion, does not tell the entire story.

“TerraForm picks up First Wind’s operating portfolio, which includes 521 megawatts of wind power assets, for an enterprise value of $862 million. That amount includes the equity purchase price, the assumption of debt for First Wind’s operating portfolio, certain swap and debt breakage fees and the purchase of a partner’s ownership stake in certain assets held by First Wind through a joint venture, according to regulatory filings.”

Now you need to enter into the looking glass and examine the rejected filing of First Wind with the SEC for their IPO. The links on Cohocton Wind Watch documents the actual degree of debt that this candidate for receivership held back in 2010. Why is this important? 

The latest law suit from the investment banksters who financed First Wind gives the answer in SunEdison Legal Woes Mount With Suits Over First Wind.

“D.E. Shaw & Co. LP and Madison Dearborn Capital Partners IV LP say the funds in the TerraForm Power matter are owed as deferred payment for SunEdison’s $1.9 billion purchase of First Wind Holdings LLC in January 2015, and will be due “immediately” if SunEdison files for bankruptcy or restructures its debt, according to the suit filed in the Supreme Court of the State of New York.

First Wind was one of SunEdison’s biggest purchases, and made it the world’s biggest renewable-energy company. It was part of a massive buying spree that racked up $11.7 billion in debt by the end of September and helped drive the company to the edge of failure.”

sunedisonstock560.jpg

Well, the immediate implosion of the SunEdison house of cards follows the same pattern of the crooked First Wind operation that cooked the books for years. Start with the notice that SunEdison In More Hot Water As SEC Investigation Begins & Bankruptcy Looms, “US Securities and Exchange Commission (SEC) has begun its own investigation into the company’s disclosures to investors about its liquidity” and add in the Bloomberg reports that SunEdison Receives U.S. Subpoena on Vivint Deal Gone Wrong.

“The Justice Department’s subpoena comes about three weeks after the deal with Vivint, a takeover that drew the ire of billionaire investor David Tepper, was canceled. Vivint sued SunEdison shortly after, saying its officials had failed to meet financial obligations and work toward consummating the merger. SunEdison auditors had meanwhile started investigations into allegations made by former executives and a current employee about the accuracy of the company’s “anticipated financial position.”

The circular accounting circles never seem to reconcile. Just maybe the basic economics used to finance these dubious energy companies need a thoroughgoing over examination by the regulatory agencies and financial community.

Read closely the delusional flimflam From a SunEdison Press Release:

"TerraForm Power's acquisition of the Invenergy wind plants leverages the power of SunEdison's platform which was enhanced with our acquisition of First Wind in January of 2015," said Ahmad Chatila, SunEdison chief executive officer and TerraForm Power chairman.  "The Invenergy transaction creates significant value for our shareholders through the accretion in our TerraForm Power ownership and the acceleration of our Incentive Distribution Rights (IDRs). Together with TerraForm Power, SunEdison's development platform will change how energy is generated, distributed and owned around the world."

No wonder that the SEC is investigating “the company’s disclosures to investors”. The public needs to wake up to the facts that the solar and wind industry promises much and delivers little. Anyone remember Solyndra and Evergreen Solar?

Who else but the Motley Fool to sum up the lesson of another failed “Green” utopian environmental illusion, What Happens to SunEdison Inc If It Goes Under?

“Here's the biggest question in a potential SunEdison bankruptcy: What is the renewable energy development business worth?

In theory, developing renewable energy projects should drive everything from the O&M business to yieldcos. But developing projects requires a lot of money, including debt, which SunEdison has found out the hard way. If that funding dries up, so does the business.”

Learn well and remember long. Generating electricity based on government subsidies is a fool’s game. Allowing quick buck artists to become developers and pitch their convoluted and Byzantine yieldco “re-use” collateral pledges is pure fraud. The public is continually being duped by opportunists, who are more skilled at ripping off the investor than producing any usable electricity. The forthcoming bankruptcy of SunEdison is another sign that energy policy under the cult of renewable production is not economically feasible.

For additional evidence that SunEdison’s Subsidy-Fueled Collapse, Robert Bryce nails the problem with a failed governmental energy policy.

“The biggest federal handouts — two of them totaling $200 million — were made in 2010 and 2011 to a subsidiary of SunEdison, First Wind, for the Milford Wind project in Utah. In addition to the federal subsidies, SunEdison got $30 million in subsidies from various state authorities, including $21 million from governmental entities in New York. On top of that, SunEdison also received $846 million in federal loans, loan guarantees, tax-exempt federal bonds, and federal insurance. The total government support for SunEdison comes out to $1.5 billion.” 

The effort to shut down coal generation, decommission nuclear plants, limit hydro facilities and restrict natural gas turbines all lead to higher electric costs and ultimate brown outs. The true cost of continuing down this road of electric burn out by underwriting uneconomical “feel good” projects is punitive and ridiculous.

A SunEdison bankruptcy reshuffling is not about cancelling debt, but needs to be the liquidation of assets and accountability for fiduciary malfeasance. What does it take to admit that the renewal experiment is a bust? Cut the “Green” loses and get on with the business of generating reliable energy.

James Hall – April 6, 2016

Subscribe to the BATR Realpolitik Newsletter

Discuss or comment about this essay on the BATR Forum

SunEdison has “defiantly declared” that it plans to hide its assets with undisclosed parties and affiliates in order to shield them from creditors as it sits on the brink of bankruptcy, the investors said in a petition filed in state court in Manhattan. SunEdison’s financial condition “is so dire and rapidly worsening” that analysts expect it to be insolvent by the time the arbitration might be decided, the shareholders said.

a free speech forum open to the public
BATRforum.gif

This site  The Web 

marketslogo.gif

tumblr page counter