UPDATE - Brookfield Renewable ups stake in TerraForm Power
Wind farm in USA. Author: Sam Howzit. License: Creative Commons. Attribution 2.0 Generic
Brookfield Renewable Partners LP (TSE:BEP.UN) and its institutional partners have increased their combined stake in US renewables yieldco TerraForm Power Inc (NASDAQ:TERP) to 65% from 51%.
This happened through a private placement of 61 million TERP shares at USD 10.66 apiece for total proceeds of about USD 650 million (EUR 553m). TerraForm Power will be using the raised funds to finance its pending takeover of Spanish peer Saeta Yield SA (BME:SAY).
The total USD-420-million commitment by Brookfield Renewable, which is controlled by Canada-based Brookfield Asset Management Inc (TSE:BAM.A), increases the company’s interest in TerraForm Power to 30%. It will fund the transaction through available liquidity.
Brookfield Renewable anticipates this incremental investment to be immediately accretive to its unitholders, adding about USD 80 million to its funds from operations (FFO) on a run-rate basis.
According to Sachin Shah, CEO of Brookfield Renewable, TerraForm Power is making “excellent progress in advancing its business plan to enhance cash flows through organic growth and de-leveraging of its balance sheet”. He further stated that the US yieldco has created meaningful value for all investors within four months of Brookfield Renewable’s initial investment.