Tag Archives: technology

SunEdison Chapter 11 Looms After Bankruptcy Loan Talks Confirmed

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. That sent shares plunging, extending losses in late trading after Reuters reported that an actual bankruptcy filing could occur as soon as Sunday. SunEdison stock dived 36.7% to about 37 cents on the stock market today , dropping to 29 cents late Friday on the Reuters report . 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. TerraForm Power and TerraForm Global on Friday  hired AlixPartners as a financial adviser, Bloomberg reported, citing sources. 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. SunEdison stock had soared 58% on Thursday, when the company released an SEC filing disclosing an audit that 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. TerraForm Power fell 7.3% to 9 on Friday. TerraForm Global slid 3.1% to 2.48. Both yieldcos drifted lower late on the Reuters report of a possible Sunday bankruptcy filing by their parent company.

Apple Won’t ‘Risk’ Intel iPhone 7 Chip; PC Woes Expected To Hurt Q1

Wall Street split Friday on Intel ‘s ( INTC ) shrouded PC future. At least one analyst hedged on Intel getting an Apple ( AAPL ) iPhone 7 chip win, as the No. 1 chipmaker prepares to unveil Q1 earnings after the close Tuesday. Intel stock was down a fraction in afternoon trading on the stock market today , near 32. Shares tanked 18% in January and early February on reports of more PC weakness , hitting a year-low 28.22 on Feb. 11. Since then, Intel stock has recovered 13%. For Q1, Intel is expected to report $13.86 billion in sales and 48 cents earnings per share, up a respective 8.5% and 17% from Q1 2015, per the consensus of 45 analysts polled by Thomson Reuters. Three months ago, Intel guided to $14 billion in sales, plus or minus $500 million. Pacific Crest analyst Michael McConnell and S&P Global Market Intelligence analyst Angelo Zino expect Intel to miss the midpoint of its guidance. And McConnell sees Intel cutting its full-year guidance. In January, Intel guided to mid- to high-single-digit sales growth over its $55.36 billion in 2015 sales. Zino notes, “The PC landscape appears to be softer than originally anticipated.” MKM analyst Ian Ing acknowledged Intel’s strong data center sales (about 30% of revenue) but expects Intel’s PC weakness “(to) more than offset strength in cloud computing.” He expects a flat Q2 for PC sales following a subseasonal Q1. But Zino sees Intel’s year-over-year PC losses becoming less pronounced exiting 2016, despite a likely challenging first half. Industry trackers IDC and Gartner predicted 11.5% and 9.6% PC shipment declines in Q1. “We see an aging PC landscape (over 600 million devices more than five years old), market share gains and new innovative devices supporting CCG (client computing group) revenue as the year progress,” Zino wrote in a research report. He reiterated his 39 price target on Intel stock. McConnell has a 35 price target and overweight rating on Intel stock. Ing maintained his buy rating but cut his price target to 38 from 40 on Intel stock. Intel has striven to get its chips inside the iPhone, and rumors recently circulated that Apple might tap the No. 1 chipmaker to source some of its iPhone 7 modems . Qualcomm ( QCOM ) has supplied the iPhone modem in the past four flagship smartphones. But Ing doubts that Apple would risk implementing an Intel chip. Teardowns show that Intel last supplied an iPhone chip in the 2008 iPhone 3G. “We retain some skepticism that Apple would add risk to their global launches,” he wrote in a report.