Brookfield Asset Management to buy bankrupt SunEdison's affiliates for $2.5 bn
08 March 2017
Canada's largest alternative-asset manager Brookfield Asset Management Inc yesterday said that it would buy one of the two "yieldcos" of bankrupt US solar company SunEdison Inc and take a 51 per cent stake in the other, for a total of about $2.5 billion.
Under the deal, Brookfield will buy TerraForm Global Inc for about $787 million and buy 51 per cent of Terraform Power Inc for $1.7 billion.
Brookfield, which has around $250 billion of assets under management, will also assume about $455 million of TerraForm Global's debt and pay $5.10 per TerraForm Global class A share, a 20 per cent premium to the stock's Monday closing price.
This deal is subject to the approval of the US bankruptcy court overseeing the SunEdison bankruptcy.
SunEdison, which had a market value of more than $10 billion in 2015, filed for bankruptcy protection in April 2016 listing $16.1 billion in liabilities, after its debt-backed acquisitions proved unsustainable.
The company's stock traded as high as $33.44 in July 2015, but was at about 34 cents on the New York Stock Exchange when it filed for Chapter 11.
TerraForm Global owns or has contracts to acquire 952 megawatts of wind and solar power in Brazil, India, China, South Africa, Thailand, Malaysia and Uruguay, while TerraForm Power owns about 2,967 megawatts of solar and wind assets in the US, Canada, the UK and Chile.
SunEdison runs solar plants in India with capacities of about 450 megawatts. It has another 800 MW of capacity under development and recently won a tender for a 500 MW plant in Andhra Pradesh.
''With the successful completion of the Board's strategic alternatives process, the TerraForm Power Board and management team are confident that Brookfield's sponsorship will enable our company to deliver cash to shareholders while strengthening our operations for future value creation,'' said Peter Blackmore, chairman and Interim CEO of TerraForm Power.
''This agreement with Brookfield is the culmination of our efforts to separate our operations from SunEdison and to position TerraForm Power for future success. With the support of Brookfield as TerraForm Power's sponsor, we will gain additional resources to continue to expand our portfolio and increase cash flow on a per share basis,'' he added.
''We are pleased to increase our significant investment in TerraForm Power and to contribute our operating expertise in the sector to position the company for growth,'' said Sachin Shah, senior managing partner of Brookfield.
''We are confident that our significant renewable power operating experience, financial resources and global institutional relationships will provide TerraForm Power with strong financial flexibility and an attractive pipeline for growth moving forward,'' Shah added.