Blackstone’s GSO will not backstop SunEdison debt: Reuters

(Reuters) — Shares of SunEdison Inc (SUNE.N) slid 10 percent in extended trade on Wednesday after Reuters reported that Blackstone Group LP’s (BX.N) credit investment arm GSO was not looking to invest in the solar company, which is facing concerns on Wall Street about its access to capital.

Earlier in the day, SunEdison shares closed up 7.6 percent on market rumors that Blackstone could backstop SunEdison’s debt. GSO was not looking to invest in SunEdison, a person familiar with the matter who spoke on condition of anonymity told Reuters.

SunEdison did not immediately respond to a request for comment, while Blackstone offered no comment.

The company has expanded rapidly, including spending more than $6 billion in acquisitions in the last year.

“Management is throttling growth,” Bank of America Merrill Lynch said in a research note on Wednesday. “We do not forecast a bankruptcy outcome, but acknowledge there are equity sentiment, macro, financial and policy risk factors beyond management’s control.”

Equity investors, including major hedge funds such as David Einhorn’s Greenlight Capital, Third Point Investors and Omega Advisors, have slashed their holdings in recent months. The stock closed at $3.25 on Wednesday. Just four months ago, it was trading above $30.

To preserve cash, SunEdison has cut 15 percent of its staff and paused selling projects to its two “yieldcos” – bundles of solar, wind and other power assets spun off into two dividend-paying entities.

The yieldcos had become important sources of funding for the company. The solar industry bellwether said last week that there were not assurances it would be able to raise the $6.5 billion to $8.8 billion needed to fund the construction of its renewable energy assets through 2016.

SunEdison shares fell to $2.89 in extended trade after closing at $3.25 on the New York Stock Exchange.