Canada's largest alternative-asset manager has submitted proposals regarding its interest in buying the yieldcos of bankrupt solar company SunEdison (OTCPK:SUNEQ).
Brookfield Asset Management (NYSE:BAM) would purchase all of TerraForm Power (NASDAQ:TERP) for $11.50 per share in cash, or a total consideration of $1.6B, and may even raise its offer to $12.50 per share if can also buy TerraForm Global (NASDAQ:GLBL).
TerraForm Power (TERP +2.1%) is higher following news that it is selling its U.K. portfolio of 24 operating solar projects representing 365 MW to Vortex, a renewable energy platform managed by EFG Hermes’ P-E arm.
TERP says the deal is valued at $580M and represents an implied multiple of ~16x its expected 2016 EBITDA contribution from the portfolio; TERP expects to receive ~$208M of proceeds from the sale.
Upon completion, TERP expects to reduce non-recourse project debt on its balance sheet by $370M.
TERP said in its 10-K filing that it has had trouble accessing debt and equity markets since SunEdison filed for bankruptcy in April, and that it still relies on SunEdison for operational, systems and staffing support, among other things; TERP said the bankruptcy also led to the loss of $11.3M in cancellations for residential solar projects.
TERP said it "has a well-defined process and timeline and has asked bidders to provide firm pricing by a defined date in early January 2017, with binding bids due shortly thereafter."
TerraForm Power (NASDAQ:TERP) and TerraForm Global (NASDAQ:GLBL) file to delay their respective Q3 Form 10-Qs (I, II).
TERP expects it will be necessary to implement more controls and remedial actions before finalizing its FY 2015 financial statements, and says potential control deficiencies at SunEdison may make it necessary to assess if it could affect its own financial reporting internal controls.
GLBL cites the need to complete all steps and tasks necessary to finalize its financial statements and other required disclosures.
Brookfield Asset Management (NYSE:BAM) met with members of TerraForm Global’s (NASDAQ:GLBL) board this week to discuss the possibility of buying the company as part of a deal to acquire TerraForm Power (NASDAQ:TERP), according to an SEC filing.
BAM discussed two potential transactions - One would include BAM purchasing all outstanding Class A and Class B shares in TerraForm’s companies, which would stay publicly listed, and BAM would replace bankrupt SunEdison (OTCPK:SUNEQ) as a sponsor of the companies; in the other scenario, BAM would buy the two yieldcos outright for cash.
BAM and its partners already tried to take over TERP, but there had been no indication of public interest in GLBL.
In court papers yesterday, SUNEQ asked to extend its control over bankruptcy by 90 days, giving it exclusive rights to file an exit plan until Feb. 15 and until April 17 to win creditor support.
SUNEQ says it also needs more time to determine how to deal with $3B in claims Terraform Power (NASDAQ:TERP) and Terraform Global (NASDAQ:GLBL) have asserted against it and its own potential claims against the yieldcos.
SUNEQ also has placed its Canadian division into bankruptcy, seeking protection from creditors and lawsuits under Canada's CCAA as it says it can no longer fund operations.
SUNE says the notice was accompanied by a subpoena seeking emails and other electronic communications sent or received by current and former directors of the company and of spinoffs TerraForm Power (NASDAQ:TERP) and TerraForm Global (NASDAQ:GLBL).
SUNE had been the subject of an informal SEC inquiry earlier this year.
SunEdison (OTCPK:SUNEQ +21.8%) is taking steps to work out a reorganization plan without liquidating its controlling stake in its TerraForm Power (TERP +0.3%) yieldco, Bloomberg reports.
TERP reportedly is talking with SUNE’s creditors to start the process of evaluating its assets as part of a reorganization in which SUNE could keep its shares in TERP and restructure around it.
The alternative would allow SUNE to hold onto TERP after exiting Chapter 11 and to benefit from its growth, or the company could decide whether to sell its stake after evaluating bids from potential buyers, according to the report.
SunEdison (OTCPK:SUNEQ) confirms it is engaged in settlement talks with its two yieldco subsidiaries, TerraForm Power (NASDAQ:TERP) and TerraForm Global (NASDAQ:GLBL), as part of its ongoing bankruptcy case.
SUNE says while it disagrees with many of the statements made by the yieldcos in their Sept. 25 press releases, a settlement of disputes with the yieldcos is "overwhelmingly in the interests of both sides," and it plans to proceed with settlement discussions while also moving forward with the sale process.
SUNE also says it is engaged in a collaborative sale process to sell either its ownership interests and other rights in the yieldcos or the entirety of the equity in the yieldcos.
Brookfield Asset Management (BAM +0.3%), which had teamed with Appaloosa Management to bid for TerraForm Power (TERP -0.2%), is not planning to participate in an auction for the company due to concerns about the process, Bloomberg reports.
BAM is said to be concerned about rules that would require it to relinquish voting rights and give up the ability to trade its TERP shares if it takes part in the auction.
The auction process reportedly also does not give BAM the right as a large shareholder to match or beat bids made for the company; BAM remains interested in acquiring TERP and would not tender its shares if the company is sold to another bidder, according to the report.
TerraForm Power (TERP -0.2%) says it reached a settlement with 9.5%-owner Appaloosa Management to resolve its stockholder derivative suit and derivative claims by stockholders relating to the Vivint Solar acquisition.
As part of the settlement, TERP agrees to segregate its IT systems from parent SunEdison’s and will appoint an additional independent director to its board.
“It seems like one step in a number of steps that shows the board of TerraForm Power preparing for a possible bidding process,” says CreditSights analyst Greg Jones; TERP and fellow yieldco TerraForm Global both said this month they are seeking to sell themselves as their bankrupt parent continues to sell off assets.