SunEdison repays margin loan after 425-MW solar sale in India

US renewables company SunEdison Inc (NYSE:SUNE) Tuesday said it has repaid a further USD 95 million (EUR 89m) under its margin loan from January, with just USD 5 million remaining outstanding.

The company also said it had sold 425 MW of solar power capacity in India to its emerging markets yieldco TerraForm Global (NASDAQ:GLBL) for a consideration of USD 231 million. A portion of the purchase price has been paid on November 20, allowing SunEdison to repay nearly in full the margin loan.

THE LOAN

The renewables major announced the loan deal in January as part of a package of funds through which it financed the acquisition of First Wind Holdings LLC. The margin loan was secured with a portion of SunEdison’s shares in its yieldco unit TerraForm Power (NASDAQ:TERP). Due to a significant drop in the stock price of the latter, SunEdison was hit by margin calls.

“We believe a significant portion of the recent volatility around the Company and its subsidiaries has been attributed to the Margin Loan," CEO Ahmad Chatila said yesterday on announcing the loan repayment. That news resulted in a 37.33% rise for SunEdison stock on Tuesday to USD 4.12.

SOLAR SALE

Indian media said earlier in the week that SunEdison would dispose of 400 MW of solar capacity in India, targeting a valuation of about USD 500 million to USD 600 million. In that context, the price of USD 231 million announced yesterday for 425 MW is somewhat disappointing.

The first portion has already been paid, while the remainder will be paid on or before December 7, 2016, according to SunEdison’s press release.

The 425-MW solar portfolio will replace a portion of the projects and the associated cash available for distribution (CAFD) that were part of TerraForm Global's initial portfolio, but the acquisition of which fell through, SunEdison said. “We are pleased to be able to add these accretive assets with 20 year contracted cash flows to TerraForm Global's portfolio and believe they are critical to achieving our 2016 dividend guidance,” said Brian Wuebbels, CEO of TerraForm Global.

(USD 1 = EUR 0.938)

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