Sunedison Inc (NYSE:SUNE) To Close Solar Factories In An Effort To Stay Afloat

Sunedison Inc (NYSE:SUNE) To Close Solar Factories In An Effort To Stay Afloat

Sunedison Inc (NYSE:SUNE) has announced its plans of selling its wafer factory in Malaysia, closing a silicon factory in Texas and restructuring its operations in Oregon. The changes will result in an additional charge of $435 million to the company’s fourth quarter earnings while at the same time eliminate about 220 jobs.

The company stated that these actions build on a previously articulated strategy of refocusing its solar material operation on asset-light proprietary silicon production through joint ventures and partnerships. The CEO Ahmad R. Chatila stated that the company is moving forward on several fronts with their asset-light strategy for upstream solar material.

He also noted that the company believes its action of re-engineering will maximize the value of their world leading silicon production technologies. The result of these would achieve SunEdison long-term growth and curtail headwinds arising from trade action.

SunEdison was flying high a year ago with the acquisition of Vivint Solar Inc (NYSE:VSLR), the second largest solar installer in the US, at the time of its purchase for $2.2 billion. After the acquisition of Vivint, large groups of investors started to dump SunEdison given the large sums it was spending on acquisitions. This marked the beginning of the slide of SunEdison’s stock.

Recently, SunEdison has backed away from some of the acquisitions it had made. The company has been reported to be shopping around some of Vivint Solar assets. Disposal of these assets has been particularly hard since Private equity group Blackstone Group LP (NYSE:BX), which still own Vivint’s shares is not willing to let SunEdison out of the deal.

SunEdison has already demonstrated that it can walk away from deals. For instance, it walked away from a deal to buy Latin America Power, which develops clean energy in South America. Last week Latin America Power sued SunEdison because of the failed deal.