D.E. Shaw Wants SunEdison Projects That Lost Utility Deals

  • Hawaii utility canceled power-purchase agreements in February
  • D.E. Shaw agreed to acquire Hawaii solar farms in December

D.E. Shaw & Co. is still seeking to acquire three SunEdison Inc. solar farms in Hawaii, even after the local utility canceled contracts to buy the electricity.

D.E. Shaw, a New York-based hedge fund managing more than $37 billion, is “eager to find a commercially reasonable solution” to reinstate the power-purchase agreements, according to a letter submitted last week to Hawaiian Electric Co. The company agreed to acquire the projects from SunEdison in December.

The utility pulled out of the contracts in February, citing SunEdison’s financial condition. SunEdison’s debt swelled last year as it expanded on six continents, and its shares plunged in the second half amid questions about its liquidity. While Hawaiian Electric’s decision reflected growing concern about the world’s biggest clean-energy developer, D.E. Shaw’s interest in the projects is a sign that its assets still have value.

Hawaiian Electric has raised concerns about “SunEdison’s ability to perform as the projects’ sponsor,” D.E. Shaw Managing Director Bryan Martin wrote in the letter. “We believe that a sale of the projects to entities within the D.E. Shaw group should help to alleviate” those issues.

SunEdison Creditor

Hawaiian Electric hasn’t completed its review of the letter, Darren Pai, a spokesman for the utility, said in an e-mail.

“We remain concerned that D.E. Shaw is a creditor of SunEdison and is trying to acquire the solar contracts to help settle that debt,” Pai said. “Should SunEdison later go into bankruptcy, as many financial media outlets are speculating, those projects could be tied up in a fight amongst creditors for a long time.”

Ben Harborne, a SunEdison spokesman, said in an e-mail that the company “remains committed to selling and supporting the completion” of the three solar projects.

Renewable Standards

“These solar power plants would increase solar capacity on Oahu by nearly 30 percent this year, supplying more than 100 megawatts of clean energy to help Hawaii meet its 100 percent renewable portfolio standards and reduce exposure to fuel price volatility,” Harborne said. “We continue to believe this is the best outcome for ratepayers and for Hawaii’s renewable energy goals.”

Hawaiian Electric canceled deals to buy power from the 65-megawatt Kawailoa solar farm, the 64-megawatt Waipio plant and the 19-megawatt Mililani II solar farm after SunEdison missed certain deadlines. In a filing, the utility cited “SunEdison’s apparently precarious financial condition” and said the projects “had been in default under the PPAs and had not cured important missed milestones.”

The utility’s decision didn’t cancel D.E. Shaw’s December agreement with SunEdison to acquire the Hawaii solar farms and other assets in exchange for extinguishing some debt.

In his letter, Miller said D.E. Shaw would seek to close the acquisition of the three projects within seven days if the utility reinstated the power-purchase agreements.

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