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SunEdison Torched After Confirming Bankruptcy Loan Negotiations

SunEdison ( SUNE ) acknowledged Friday it’s in debtor-in-possession talks with creditors and will need a $310 million loan to dig through a potential bankruptcy. The company’s first- and second-lien loan holders entered into confidentiality agreements March 17, a day after SunEd missed the second deadline to file its annual 10-K paperwork. But “the negotiations with respect to such potential financing transactions are still ongoing,” SunEdison cautioned in an 8-K filing. “There can be no assurance that any agreement will be reached.” Debtor-in-possession negotiations are often a precursor to a bankruptcy filing. SunEd yieldcos TerraForm Power ( TERP ) and TerraForm Global ( GLBL ) have separately warned of “substantial risk” that SunEd might seek bankruptcy protection. As of Sept. 30, SunEdison had wracked up $11.7 billion in debt. In the March 17 presentation — furnished Friday alongside the 8-K — SunEdison said it planned to focus on core North America, India and Latin America regions, while maintaining growth regions on “hot idle” stance until liquidity improves. SunEd aims to monetize its residential and smaller commercial (RSC) unit and reduce operational expenses to below $400 million. The now-failed Vivint Solar ( VSLR ) acquisition was originally intended to be melded into SunEd’s RSC business. In Q1, SunEdison said it plans to use $779 million in cash, with $481 million spent on projects. As of April 2, SunEdison had 3.7 gigawatts in project investments expected to generate $897 million in proceeds. But it still needs $272 million in future project investments to reach that value. Since October, SunEdison has cut its workforce by 40%, and it is angling for a total 50% reduction, along with a $150 million cut from additional non-labor savings. The firm also completely exited Japan. In morning trading on the stock market today , SunEdison stock was down more than 30%, near 40 cents, losing nearly all its 58% gains Thursday, when a filing with the U.S. Securities and Exchange Commission showed no evidence of fraud by SunEd executives. But the auditor found wrongdoing by a former non-executive employee involved in the bungled Vivint Solar acquisition talks and an “ overly optimistic culture ” related to projected cash flow. SunEdison noted it terminated the employee upon discovery of the wrongdoing.

Cablevision-Altice, Charter-TWC Mergers Seen Advancing

Cablevision Systems ( CVC ) stock jumped Friday on a report that New York City will not block its acquisition by Europe’s Altice Group. In New York, Altice would compete against  Verizon Communications ( VZ ) and its FiOS services. Verizon said earlier this week it plans to expand FiOS services to Boston. Cablevision stock was up more than 2%, near 33.70, in morning trading in the stock market today , breaking out of a flat base at 33.45 buy point. Altice had been under scrutiny because of its debt. New York City, however, determined that former Mayor Michael Bloomberg gave away its authority in cable mergers to the state, the New York Post said in a report. Meanwhile, Charter Communications ( CHTR ) is awaiting the Federal Communications Commission’s approval for its acquisition of Time Warner Cable ( TWC ). An administrative law judge in California on Tuesday recommended that the Charter-TWC deal be approved with conditions, clearing a hurdle. The FCC thwarted Comcast ’s ( CMCSA ) proposed purchase of TWC in early 2015. If both the Charter-TWC and Altice-Cablevision deals go through, cable TV firms are likely to explore asset swaps of cable systems in different markets, a Barclays analyst has speculated. Comcast could be involved, says Barclays. Charter also plans to buy privately held Bright House Networks. Altice in May acquired a 70% stake in Midwest-based Suddenlink Communications. Altice agreed to pay about $10 billion, or $34.90 per share, for Cablevision, including $3 billion in cash.

HP Acquisition Of 3D Systems ‘Unlikely’; Citi Downgrades DDD

It’s “highly unlikely” HP Inc. ( HPQ ) will acquire 3D Systems, says Citigroup, which downgraded both 3D Systems ( DDD ) and its rival Stratasys ( SSYS ) on valuation after their stocks jumped on Thursday. HP plans to enter the 3D printer market this year. 3D System stock was down 4% in early trading in the stock market today , after rising 10% on Thursday. Stratasys stock was down 8.5%, negating a 5.9% rise on Thursday. Another 3D printer maker, ExOne ( XONE ), was down more than 3% early Friday. Citigroup analyst Kenneth Wong downgraded 3D Systems to sell and downgraded Stratasys to neutral. “(3D System) shares have nearly tripled since troughing mid-February and have doubled year-to-date, despite (3D printer) market conditions that remain unsettled. We believe the upside scenarios from operational efficiencies upside to take-out potential are overstated,” said Wong in a research note. 3D Systems on April 4 named Vyomesh Joshi as its CEO. Joshi had been executive vice president of the imaging and printing business of HP, formerly Hewlett-Packard before its split last year. “We expect Joshi to bring a fresh set of eyes to DDD’s strategic growth and profit initiatives,” Wong said. “Investors believe Joshi’s HP roots enhance the possibility of an HP acquisition of DDD. While we see how bullish investors might connect the dots here, (we) believe that an acquisition by HP is highly unlikely.” Bank of America Merrill Lynch upgraded 3D Systems on Thursday to buy on views that Joshi will spark a rebound at the company. Stratasys’ stock run-up also raises valuation issues, said the Citigroup analyst. “We don’t believe ‘good enough results’ will be sufficient with the recent boost in sentiment, and with industry checks still soft, we believe near-term upside is limited,” said Wong. “Our conversations with those in the industry suggest unit volumes have held, but there has been a downshift in buying towards smaller lower priced systems. “Contrary to investor expectations, we still believe that under ‘normal’ operating conditions, SSYS can generate double digit margins.”