Sunedison Inc (OTCMKTS:SUNEQ) is reported to be conducting negotiations with TerraForm Power Inc (NASDAQ:TERP) and its parent TerraForm Global Inc. (NASDAQ:GLBL). The company has a controlling stake in TERP, which it is reluctant to liquidate as part of its reorganization process. Currently, representatives from SUNEQ are conducting talks with the creditors, so as to evaluate the TerraForm assets. If successful, Sunedison just might be able to keep its stake and restructure around it.
It has been over six months since the company had filed for bankruptcy, but is yet to specify whether it would emerge as a going concern from chapter 11 or liquidate. TERP and GLBL had earlier filed for claims of approximately $3 billion, against SUNEQ. As such, Sunedison is under immense pressure to sell its class B voting shares in TERP, so as to settle the debts. However, as soon as the claims had been filed, the company commenced talks with the two Yieldcos, but did not specify when a settlement could be expected.
The company also stated that it would hold an auction for its class B voting shares in TERP, with the Yieldcos looking for buyers. However, analysts believe that it is crucial for SUNEQ to continue holding its stake in the Yieldco, once the chapter 11 has been completed. So far, the auction has attracted interest from a number of large asset management firms, such as BlackRock Inc and Golden Concord Holdings Ltd.
TERP and GLBL collectively own power plants that generate over 3 gigawatts of electricity, in areas across the US, Canada, UK and Chile. The CEO of Sunedison, John Dubel, commented that the chapter 11 process is now at a critical stage. He expressed his view that a settlement between the Yieldcos and SUNEQ was in favor of both parties and claimed that negotiations would continue, as they prepared for the sale. The auction has also drawn fire from Brookfield Asset Management Inc, which announced that it would not be taking part in the auction, as it had concerns with the process. However, it still expressed interest in the assets.
Sunedison Inc (OTCMKTS:SUNEQ) had a trade volume of 27.91 million and gained 83.69% in terms of its share value, during the October 6 trading session, to close at $0.935 per share.
