Canada’s Brookfield Asset Management Inc (TSE:BAM.A) has formally completed its acquisition of a 51% stake in US renewables yieldco TerraForm Power Inc (NASDAQ:TERP), it was announced on Monday.
The Canadian asset manager is now also the new sponsor of TerraForm Power, replacing in that role SunEdison Inc (OTCMKTS:SUNEQ), the debt-laden renewables developer that created the yieldco. It went bankrupt earlier this year.
TerraForm Power on Monday also released its financial guidance for 2017, available in the table below.
| Guidance in USD million, unless otherwise noted |
2017 guidance |
2017 PF guidance |
| Power generation (in MWh) |
7,400-7,700 |
7,250-7,550 |
| Net revenue |
590-610 |
575-595 |
| Net profit (loss) |
(160)-(180) |
(185)-(205) |
| Adj revenue |
620-640 |
605-625 |
| Adj EBITDA |
440-460 |
430-450 |
| CAFD |
90-110 |
105-125 |
The pro-forma (PF) figures take into consideration asset sales and capital structure changes executed to-date and expected post-close.
BROOKFIELD DEAL
The shareholders of TerraForm Power approved the transactions with Brookfield at a special meeting held on October 6. Under the terms of the deal, they were able to choose to get USD 9.52 (EUR 8.09) per share in cash or retain one share of Class A common stock in TerraForm Power for each share of its Class A common stock owned immediately prior to the merger. The elections of the stock option were oversubscribed, with a proration ratio of 62.6%. This means that stockholders choosing to receive all of their consideration in stock have retained 62.6% of their shares of Class A common stock and also got cash in respect of the remainder.
The Class A stockholders of record on the closing date were also entitled to receive a special dividend of USD 1.94 per share, immediately prior to the effective time of the merger.
Following completion of the transactions, TerraForm Power’s interim CEO Peter Blackmore resigned from the position and was replaced by Brookfield managing partner John Stinebaugh. At the same time, Matthew Berger, former executive vice president and finance head of IDI Gazeley within the Brookfield Property Group, took Rebecca Cranna’s position as chief financial officer of the yieldco.
“We see multiple paths to accretively grow the business, both organically and through acquisitions that will expand our premier portfolio of operating solar and wind assets,” Stinebaugh commented.
TerraForm Power owns and operates solar and wind assets with a combined capacity of a bit over 2,600 MW, mostly located in the US. This includes 1,532 MW of wind, 671 MW of utility-scale solar and 405 MW of distributed solar assets, according to a presentation published on Monday. It now also has access to a 3,500-MW rights of first offer (ROFO) pipeline, as well as to a roughly 500-MW pipeline with third parties.
(USD 1.0 = EUR 0.849)
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Illinois wind farm. Author: Tom. License: Creative Commons. Attribution 2.0 Generic.
