SunEdison Seeking Equity Partners for Operations in India

  • Executive says Indian business will continue on normal course
  • SunEdison won projects in India with record-low bids

SunEdison Inc., the renewable energy company that filed for bankruptcy protection on Thursday following a $3.1 billion acquisition binge that left it swimming in debt, vowed to press ahead with plans to build solar projects in India, tapping equity partnerships to do so.

“Everyone in India has been partnering for equity,” SunEdison Asia-Pacific President Pashupathy Gopalan said in an interview. “We didn’t do that in the past, so now we have to do that. We have to learn from our peers and do what others have already done.”

The clean-power giant listed $16.1 billion of debt in Chapter 11 filings on Thursday in Manhattan federal court, making it the biggest U.S. bankruptcy in more than a year.

SunEdison’s troubles have been attributed to the company’s torrid pace of expansion and the buying spree, though the bankruptcy also comes as energy companies are succumbing to a slump in prices.

The company’s business model -- building clean-energy plants around the world and then spinning them off to publicly held companies it controls -- may also complicate its reorganization effort. While two of its best known companies, TerraForm Power Inc. and TerraForm Global Inc., are not part of the bankruptcy, SunEdison acknowledged responsibility for some of their debt in court papers.

Indian Business

Maryland Heights, Missouri-based SunEdison has 550 megawatts of projects under construction in India as part of a 1.7-gigawatt pipeline of projects that it plans to develop and build in the next two years, Gopalan said.

“The Indian business will continue on its normal course,” Gopalan said. “We will continue to build and develop and take our India business forward.”

India had 5.25 gigawatts of installed solar capacity as of the end of January, according to data on the Ministry of New and Renewable Energy’s website. Under Prime Minister Narendra Modi, the nation is targeting 100 gigawatts by 2022.

“SunEdison’s bankruptcy says more about the company’s strategic decisions than about the solar industry as a whole,” Bloomberg New Energy Finance chief solar analyst Jenny Chase wrote in a note to clients. “What has distinguished SunEdison has been its relentless pursuit of growth into new sectors, new geographies and new technologies, in which it has invested vast amounts of borrowed money.

SunEdison shook up India’s solar market through its bidding on solar projects. For example, the company took all 500 megawatts of capacity offered in a November auction in the southern state of Andhra Pradesh, offering to sell power at 4.63 rupees (7 cents) a kilowatt-hour, a record low at the time.

“Some projects, such as the company’s portfolio in Andhra Pradesh, India, won contracts to supply power at very low prices and may struggle to earn returns as a result,” BNEF’s Chase said in her note.

Before it's here, it's on the Bloomberg Terminal.