TerraForm Global has said in a regulatory filing it is in “active discussions” for SunEdison, its bankrupt parent company, to sell off its controlling interest in the listed unit.
The filing shows SunEdison, which had $16.1 billion in liabilities when it filed for bankruptcy in April, is planning to move on without at least one of its publicly traded yieldcos. SunEdison has a 34 percent interest in both of its yieldcos and owns 100 percent of Class B shares.
No update was provided on the fate of TerraForm Power, the second vehicle. TerraForm Global operates a 917MW solar and wind portfolio mostly in Asia and South America, and TerraForm Power has a 3GW portfolio of assets in the US, UK, Canada and Chile. Both were hoping to avoid being drawn into SunEdison’s bankruptcy proceedings.
TerraForm Power and TerraForm Global have yet to file their 2015 annual report, partly due to SunEdison being unable to file its own, but the companies are still solvent. Swami Venkataraman, a vice-president and senior credit officer at Moody’s, told Infrastructure Investor in May that the TerraForm’s main priority for now was “to survive on their own”.
When they are able to file their own financial statements and assemble their own management outside of SunEdison, and more generally “when that confidence is back, then they can start thinking about next steps,” Venkataraman said.
The yieldcos played a prominent role in SunEdison’s collapse. The renewable energy company was on a mission to expand fast, increasing its yearly capacity additions from 430MW in 2012 to 1GW in 2014. It created TerraForm Power and TerraForm Global to finance its growth, buying operational assets developed by SunEdison and using third-party investor capital. The yieldcos would send the proceeds and cashflows back to its parent.
But a botched $1.9 billion acquisition of renewable energy company Vivint Solar shattered investors’ confidence in SunEdison, and its share price was in a freefall until it filed for bankruptcy in April.
SunEdison has recently been selling off smaller assets as well. Last week, Pattern Energy Group purchased the development rights to a 600MW wind project that was once in SunEdison’s pipeline. It divested its controlling interest in the 150MW Mount Signal 2 solar plant in California to an affiliate of hedge fund DE Shaw earlier this month, and it agreed to sell a 7MW portfolio of rooftop solar projects in India to Amplus Energy Solutions in June.