SunEdison’s Yieldco Unit TerraForm Plans Share OfferingJustin Doom
SunEdison Inc., the best-performing U.S. solar company this year, is planning an initial public offering for a unit that was formed to own and operate renewable-power plants.
TerraForm Power Inc. will initially have a portfolio of 524 megawatts of solar farms in the U.S., Canada, the U.K. and Chile, according to a Securities and Exchange Commission filing today.
This so-called yieldco model is becoming an increasingly common way for renewable-energy developers to raise capital. The developers build new projects and sell them to the affiliated yieldco, using the proceeds to fund additional plants. Recurring revenue from selling electricity provides funds for the yield companies to buy more power plants as they’re built, and provide investors with dividends.
A unit of Abengoa SA, the Spanish solar-thermal developer, filed to go public in April. NRG Energy Inc. and TransAlta Corp. formed similar ventures last year.
TerraForm will buy renewable-energy assets from SunEdison and other companies, according to the filing. It’s seeking to raise $50 million in the IPO, a placeholder amount that may change. SunEdison said it hasn’t determined how many shares will be offered or the price. The shares will trade on the Nasdaq exchange under the symbol TERP.
Goldman Sachs Group Inc., Barclays Plc and Citigroup Inc. are underwriting the offering.