20 April 2016

Struggling SunEdison launches 'fire sale' of 5.3GW of projects

SunEdison has put a list of 5.3GW of renewables projects up for sale, as it looks to stave off potential bankruptcy.

The 46 projects listed include operational assets as well as some still being developed, in Asia, North and South America, and Europe. (See table)

SunEdison admitted that future projects in the list will require a further $250 million of investment, and estimates that they could generate up to $900 million in value once they are complete. 

COD - Commercial Operation Date, POC - Percentage of Completion

COD - Commercial Operation Date, POC - Percentage of Completion 

Many investors are believed to sniffing around the projects. Finnish utility Fortum has already been linked to several SunEdison's projects in India, which include a 500MW plant in Andhra Pradesh.

One investor told Environmental Finance that SunEdison was holding a "fire sale". But he went on to warn that potential buyers need to be wary of becoming embroiled in legal action if SunEdison falls into bankruptcy.

"There is always a risk that a sale outside of bankruptcy can be set aside later as a preferential transfer or not for fair value," he said. "I would not take the risk."

Another investor pointed out that SunEdison had already sold its most desirable assets to its yieldco subsidiaries. "The remaining assets will be complicated develop and will be difficult to sell quickly for SunEdison," he said.

The publication of the list of assets for sale comes after the struggling renewables developer admitted on Friday, through a filing with the US Securities and Exchange Commission (SEC), that it is engaged in debtor-in-possession (DIP) talks with its creditors.

According to the filing, the company took the step of publishing its full financial position as part of tentative agreement with some of its lenders.

However, the company admitted that is has yet to reach a full agreement and that negotiations over any DIP financing were ongoing.

Much of the company's troubles stem from its aggressive expansion plans and its failure to complete a planned acquisition of US rooftop solar firm Vivint Solar, which would also have involved dropping down its operational assets to its developed markets yieldco, TerraForm Power.

However, the yieldco's shareholders objected and, in February, Vivint terminated the agreement citing SunEdison's failure to complete the deal quickly enough.

The company's share price has plummeted from a high of $32 in June 2015 to about $0.31 currently.