Yieldco sheds light on settlement discussions with SunEdison

US renewables yieldco TerraForm Power Inc (NASDAQ:TERP) has circulated a draft settlement agreement to its bankrupt parent SunEdison (OTCMKTS:SUNEQ), certain lenders and advisors.

On Tuesday, the company published a presentation that contains an overview of its settlement discussions. According to the document, the settlement proposal envisages that SunEdison and all pre-transaction shareholders would receive equal value per share if a sale is implemented. SunEdison, in turn, will make a one-time cash payment in a negotiated amount to cover the unpaid minimum quarterly distributions due to class A shareholders.

The yieldco should also be paid certain amounts that its parent was obliged to reimburse under sponsorship arrangements. All other claims will be abandoned.

TerraForm Power has claims against SunEdison estimated at over USD 1 billion (EUR 906m), while those of its sister company, TerraForm Global Inc (NASDAQ:GLBL), surpass USD 2 billion. The yieldco says in its presentation that it prefers a settlement with its parent, but is ready to litigate issues to resolution in the absence of a deal.

TerraForm Power also noted that its process of exploring strategic options is ongoing and no decision has been made so far. As previously announced, the bankrupt company and the yieldcos are together seeking buyers for either SunEdison's stakes and other rights in the TerraForms or the entirety of the equity in the two firms.

Last month, DE Shaw Renewable Investments LLC (DESRI) made a non-binding proposal to become TerraForm Power’s operating sponsor.

(USD 1.0 = EUR 0.906)

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