[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / September 20, 2016 / Active Wall St. blog coverage looks at the headline from TerraForm Power, Inc. (NASDAQ: TERP) and TerraForm Global Inc. (NASDAQ: GLBL). Bankruptcy-facing SunEdison Inc.'s yield companies, TerraForm Power and TerraForm Global, stated on September 19, 2016, that they were exploring strategic options which include possibility of merger or sale of their entire businesses. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
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The Board and management teams of TerraForm Power and TerraForm Global, who own and operate clean energy power plants, were exploring options to sell their equity interests as well as looking out for a new sponsor. The new sponsor would help in stabilising the business and help future growth of both companies. The idea is that the companies would negotiate a new agreement with the sponsor who would also take over existing sponsorship arrangements from SunEdison. If necessary, the companies are also looking at the possibility of operating independently without a sponsor.
Commenting on the development, Peter Blackmore, Interim Chief Executive Officer said:
"Our Board and management team have been working to preserve and protect stockholder value and, after careful review, we have decided that exploring all possible alternatives to maximize that value is in the best interests of all our stockholders. We have been working closely with SunEdison on disposition alternatives so far and regard a collaborative exploration of strategic alternatives."
Background
TerraForm Power and TerraForm Global are yield companies of SunEdison. Yield companies are publicly-traded subsidiaries that are owned and are 'sponsored' by developers like SunEdison which are responsible for the build-out of power generation as well as management and maintenance under a long-term contract. TerraForm Power owns and operates over 500 hundred wind and solar energy power installations that generate 2,987 MW power with operations across the U.S., the U.K., Canada and Chile. TerraForm Global owns 917 megawatts of solar and wind plants, and is present in emerging markets like southeast Asia and South America.
SunEdison is a global renewable energy development company that develops, finances, installs, owns and operates renewable power plants. SunEdison had filed for restructuring under chapter 11 of the U.S. Bankruptcy Code in April 2016 as it had accumulated over $16.1 billion in debt. Its publicly traded companies, TerraForm Power and TerraForm Global, were not part of the filing.
Bankruptcy charges faced by SunEdison have led to financial and legal difficulties for these two companies. Both companies had not filed a quarterly financial report since Q3 2015 or an annual report for 2015. In August 2016, the NASDAQ stock Exchange had threatened both companies with de-listing for their non-compliance.
Since SunEdison still holds assets in these companies, any decision by the TerraForm Power and TerraForm Global would require approval from US Bankruptcy Court for the Southern District of New York. TerraForm Power and TerraForm Global are also looking at mutually settling inter-company claims against SunEdison.
Attracting Investors
From the time that SunEdison filed for bankruptcy, a number of companies have shown interest in acquiring its stake in TerraForm Power and TerraForm Global. Of the two companies TerraForm Power is a clear favourite. In June 2016, investment firm Brookfield Asset Management became the largest investor of TerraForm Power when it acquired 11.1 million Class A shares of TerraForm Power for $98.5 million. In July 2016, Brookfield joined hands with Appaloosa Management L.P., another major investor of TerraForm Power, to acquire class B shares from SunEdison. In August 2016, it was speculated that along with Hedge Fund Manager, D.E. Shaw & Co., and Golden Concord Holdings Ltd, a Chinese clean energy company, had shown interest in acquiring SunEdison's stake in TerraForm Power.
TerraForm Global could also easily attract investors and is ripe for picking.
Stock Performance
Shares of TerraForm Power were on an upswing following the news of possibilities of strategic sale. The stock is trading up 3.07%, closing Monday's session at $13.45 on volume of 1.19 million shares. The company's shares gained 6.92% since the beginning of the year. Additionally, the stock has advanced 41.28% in the last six months. The company's shares have a dividend yield of 10.41%.
TerraForm Global's share price finished yesterday's trading session at $3.76, surging 10.59%. A total volume of 2.55 million shares exchanged hands, which was higher than the 3 months average volume of 931.96 thousand shares. The stock has advanced 27.89% and 13.60% in the last three months and past six months, respectively. The stock has a dividend yield of 29.26%.
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SOURCE: Active Wall Street
