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After Soaring 70%, SunEdison (SUNE) Crashes 30%

Image via www.sunedison.com

One of the most volatile stocks on the market, SunEdison Inc. (SUNE), is once again having another extreme day of trading. SUNE stock yesterday soared 70% because an internal probe of the company found no evidence of fraud. That’s a good thing, right?

Well today, shares of SunEdison are down just over 30% during morning trading, and this decline is most likely related to the company discussing with creditors about restructuring financing. The discussions are ongoing and there is no guarantee that a deal will be reached.

According to a report via Bloomberg, “The company and its first- and second-lien lenders entered into a confidentiality pact on March 17 for the financing transactions in a potential bankruptcy filing, the company disclosed in a regulatory filing to the Securities and Exchange Commission, which included a 34-page slide presentation to creditors.”

SunEdison needs a $310 million loan to fund it through a potential bankruptcy process, according to estimates in the March 17 presentation per Bloomberg. The company projected using a total of $779 million in cash for the first quarter.

The negotiations come as SunEdison faces default on at least $1.4 billion in loans and credit facilities, and after it failed to make a $2.6 million interest payment on its 2% convertible bonds maturing in 2018. The company is flirting with bankruptcy and according to Bloomberg, “analysts said the disclosure may please creditors.”

SunEdison Inc. has a Zacks Rank #3 (Hold) and as of 10:40 AM ET, its stock was down 36.76% and continuing to decline.

 

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