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SunEdison Inc (SUNEQ)’s Yieldcos Receive Default Notices From Bondholders

SunEdison SUNEQ

SunEdison Inc’s  yieldcos, TerraForm Power Inc and TerraForm Global, have received notice of default from bondholders. The companies were unable to submit audited financial statements for 2015.

SunEdison Inc (SUNE)

TerraForm Could Face Immediate Payment Demand

On May 31, TerraForm Power Operating LLC received a notice of default from the holders of its 5.875% senior notes due 2023 and 6.125% senior notes due 2025. The company has 90 days to filing its annual report for the year ended December 31, 2015. Otherwise, the company could face demands for immediate payment on the bonds, The Wall Street Journal reported.

TerraForm companies have $950 million of 2023 notes outstanding and $300 million of 2025 Notes outstanding.

On May 27, TerraForm Power Operating, a subsidiary of TerraForm Power, entered into a seventh amendment to its credit and guaranty agreement with Barclays Bank and certain other lenders party.

The amendment extends the date by which TerraForm Power must deliver its financial statements and accompanying audit report with respect to fiscal year 2015. The date for delivering the financial statements and accompanying audit report for fiscal year 2015 previously was May 28.

The seventh amendment also extends the date by which TerraForm Power must deliver its unaudited quarterly financial statements for the fiscal quarter ending March 31 to June 30, and with respect to the fiscal quarters ending June 30 and September 30 to the date that is 75 days after the end of each fiscal quarter.

On June 1, 2016, TerraForm Power adopted an amendment to the amended and restated limited liability company agreement, dated as of July 23, 2014.

Pursuant to agreement amendment, until the first annual meeting of the company’s stockholders held after December 31, 2016, the company delegated to an independent conflicts committee the exclusive power to exercise all of its rights, powers and authority to manage and control the business and affairs of the company and its controlled affiliates relating to or involving SunEdison and any of its affiliates.

The agreement amendment was approved and authorized by the company’s corporate governance and conflicts committee. On June 1, the board reaffirmed the power and authority delegated to the conflicts committee with respect to these SunEdison-related matters by ratifying the adoption of the company’s agreement amendment.

The current members of the conflicts committee are Mr. John F. Stark, Mr. Chris Compton and Mr. Hanif Dahya.

SunEdison Selling Wind Project

SunEdison is reportedly selling off one of its major wind projects to Sitec RE. If the deal is agreed upon, it would be SunEdison’s first Indian asset sale since its bankruptcy. Reports now suggest that the solar firm is close to an agreement with Sitec RE. The deal would see SunEdison sell a 24 MW wind-power plant in Andhra Pradesh to the domestic firm. Sources close to the situation say the transaction could be completed within the next 10 days. The details of the agreement have not been released. A majority of SunEdison’s India portfolio is solar. It has 410 MW of solar power, and an extra 1,000 MW of solar under construction.

Previously, we reported that David Tepper’s hedge fund Appaloosa Management LP acquired a major stake in TerraForm Global in the first quarter. The investor bought 3.65 million shares in the yieldco, according to regulatory filings.

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