Concerns are growing over the beleaguered renewable power giant SunEdison's ability to obtain the letter of credit (L/C) facilities it needs to stay in business.

The facilities used by the company are critical to its project development business.

Accounting problems

SunEdison uses the facilities to secure or support the performance of several aspects of its business, including bids, trade contracts, interconnection agreements, power purchase agreements, engineering and procurement contracts and operation and maintenance contracts.

But SunEdison recently warned it had uncovered problems in its accounting processes and needed to delay its annual stockholders report.

The announcement caused the company's share price to fall 15.5 per cent when markets re-opened after the news broke.

Growing concerns

With concerns mounting over the state of the renewable giant's financial position, some analysts are saying that banks may now prove reluctant to provide the L/C facilities SunEdison requires without seeing robust and credible financial statements.

SunEdison has a US$750 million committed L/C facility with US$716 million in L/Cs outstanding at 30 September 2015.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.