SunEdison Inc (OTCMKTS:SUNEQ) received an offer from Brookfield Asset Management for its two yieldcos. Canada’s largest alternative asset manager placed a bid to acquire the bankrupt solar energy firm’s TerraForm Power Inc. (NASDAQ:TERP) and TerraForm Global Inc. (NASDAQ:GLBL). Brookfield is now in exclusivity talks, but it remains to be seen if the solar firm will agree to the offer.
Will SunEdison Inc Sell Yieldcos?
Over the past year, the future of SunEdison’s yieldcos has been in jeopardy. Ever since SunEdison filed for Chapter 11 bankruptcy protection in April 2016, many investors, traders and financial experts wondered when TerraForm Power and TerraForm Global would follow suit. At the same time, there has been quite a bit of interest to purchase the yieldcos from SunEdison.
Brookfield, which is already a big investor in the yieldcos, has entered into an exclusivity agreement to buy the two yieldcos. According to a regulatory filing on Monday, Brookfield has presented an offer of $12 a share for TerraForm Power and $4.35 a share for TerraForm Global.
Here is the Securities & Exchange Commission (SEC) filing:
“In addition to the proposals previously submitted on January 9, 2017 by Brookfield (the “Original Proposals”), Brookfield made an additional oral proposal to the Issuer (the “Additional Proposal”) in respect of a potential transaction on alternate terms from the Original Proposals in which Brookfield would purchase 100% of the Issuer for $12.00 cash per share on a fully diluted basis, conditioned on the purchase by Brookfield of either 100% of GLBL or at least 50% of GLBL in a sponsorship transaction.”
At the time of this writing, TerraForm Power is trading at $11.70, while TerraForm Global is trading at just under $4.50.
SunEdison and its yieldcos have yet to issue a statement on the reports.
The solar firm formed the yieldcos to manage its portfolio of green assets, like solar and wind farms. SunEdison has been shedding many of its assets all over the world, including in India, the U.S. and Australia. Its portfolio is valued at around $3 billion.
SunEdison Inc Concedes to Zero Hope for Shareholders
For the last few months, shareholders of SunEdison have been fighting tooth and nail in the court system for remuneration. During this time, the shareholders have made numerous requests to the court to establish an equity committee so they can receive monetary compensation from their investments.
What does SunEdison’s representation say? Well, there is zero hope for the shareholders at this time.
“Unfortunately, the facts of the debtors’ situation lead to the inevitable conclusion that the ability to pay all creditors and return any value to equity holders is entirely unlikely,” said Homer Parkhill, a managing director at Rothschild Inc, in court papers.
Rothschild has been representing SunEdison. It has helped the solar firm in the court system and selling off its assets to interested parties.
Last year, both creditors and shareholders were complaining about the solar firm’s insurance policies. They argued in November that multi-million-dollar policies were still covering the company’s executives. This was estimated to be worth $150 million, and the two parties claimed was unfair.