Brookfield negotiates exclusivity to buy both SunEdison yieldcos

Wind turbines. Author: Rex Brown. License: Creative Commons, Attribution-NoDerivs 2.0 Generic.

Jan 23 (Renewables Now) - The two yieldcos of bankrupt firm SunEdison (OTCMKTS:SUNEQ) said today they have entered into an exclusivity agreement with suitor Brookfield Asset Management Inc (TSE:BAM.A) and that a pact has been signed with their current parent.

According to two separate statements from the renewables yieldcos -- TerraForm Power Inc (NASDAQ:TERP) and TerraForm Global Inc (NASDAQ:GLBL), the companies will negotiate potential business combinations exclusively with Canadian asset manager Brookfield. The exclusivity period for a transaction involving TerraForm Power ends on February 21, while the one for a deal with its sister company runs through March 6, 2017.

As announced earlier this month, Brookfield, which currently holds a stake of 12.12% in TerraForm Power, has offered to pay USD 11.50 (EUR 10.73) in cash for every share it does not already own in the firm. In a new regulatory filing, TerraForm Power says that Brookfield has made an oral proposal to buy 100% of the company for USD 12.00 in cash apiece in the event that it also acquires 100% or at least 50% of the sister yieldco in a sponsorship transaction.

At the same time, Brookfield has proposed four possible transactions to TerraForm Global, including taking full control of the company for as much as USD 4.35 per share or replacing SunEdison as its sponsor and purchasing just a 50.1% stake for up to USD 4.25 apiece.

Also on Monday, both yieldcos said they had signed non-binding memoranda of understanding (MoU) with their bankrupt parent, SunEdison, that outline potential separate settlements of claims between the parties. The settlements are pending clearance by the US bankruptcy court overseeing the SunEdison Chapter 11 cases. Under the terms of these pacts, SunEdison would receive a sum equal to 36.9% of the total consideration paid to all of the TerraForm Power’s shareholders as well as 25% of that paid to all TerraForm Global stockholders.

A final settlement agreement in both cases is expected by January 27.

TerraForm Power has nearly 3 GW of wind and solar capacity, of which 2,364 MW are in the US and the rest is in Canada, the UK and Chile. As of October 2016, TerraForm Global had 989.5 MW gross.

(USD 1.0 = EUR 0.933)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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