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Bankruptcy Could Delay SunZia Project

Hikers point out the proposed route of the SunZia power line as they overlook Paige Canyon. Credit: A.E. Araiza/Arizona Daily Star

By Tony Davis Arizona Daily Star

A global renewable-energy developer that is the only publicly known supplier for the proposed $2B SunZia power line is on the edge of filing for reorganization under federal bankruptcy law, news reports and a subsidiary say.

Missouri-based SunEdison Inc., saddled with debt, disclosed in a public document filed with the Securities and Exchange Commission Friday that it has entered into confidential negotiations with lenders over proposed financing transactions. These transactions, known as debtor-in-possession loans, are typically done to prepare for Chapter 11 bankruptcy filings.

The company has proposed building a large New Mexico wind farm that would supply renewable power to the controversial SunZia project, whose power lines would slice through Southeast and Central Arizona.

Three outside analysts say that proposed SunEdison projects such as the wind farm are likely to be delayed while the company prepares for and goes through much of the Chapter 11 bankruptcy. The process typically allows an insolvent company to reorganize and develop a schedule to pay off its debts.

SunZia spokesman Ian Calkins said last week that company officials are extremely confident of finding other renewable energy clients and that SunEdison’s problems won’t affect the power line schedule.

A year ago, SunEdison was considered the leading global renewable-energy development company. But toward the end of 2015, its losses mounted. Its debt topped $11B. Its stock price crashed from $31 last July to 35 cents a share on Friday, down 23 cents from Thursday following the release of its document disclosing negotiations for financing during a bankruptcy filing.

It has failed to meet legal deadlines, most recently March 30, to release a 2015 annual report even though that could result in a technical default with big bank lenders. It’s been reported by numerous newspapers and media websites that the company faces an SEC investigation into its financial situation.

Read more at Arizona Daily Star

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