NEW YORK (TheStreet) -- SunEdison (SUNE) stock is down another 8.05% to $1.37 in late-morning trading on Wednesday, as the company holds talks with holders of $725 million in second-lien loans to fund a debtor-in-possession facility, Debtwire reported yesterday.
A debtor-in-possession financing facility is often viewed as a precursor to a bankruptcy filing.
"DIP negotiation means that the company has effectively run out of cash and they get to pay their creditors 'fair market value' for the secured assets versus the contracted value," Axiom Capital analyst Gordon Johnson told Reuters.
This week's talks have centered around providing the company with roughly $300 million in new liquidity, Debtwire added.
SunEdison has twice delayed filing its annual report. The company initially extended the deadline while it conducted an internal investigation into the accuracy of the its expected financial position, and later pushed back the filing again due to "material weaknesses" in its financial reporting.
SunEdison had outstanding debt of $11.67 billion and cash and cash equivalents of $2.39 billion as of Sept. 30, according to Reuters.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
SunEdison's weaknesses include its generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: SUNE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.