SunEdison Creditors Won’t Block Plan to Sell Clean-Energy Assets

  • D.E Shaw cancels deal stemming from First Wind acquisition
  • SunEdison filed biggest U.S. bankruptcy of the year in April

SunEdison Inc., the bankrupt clean-energy giant, has eliminated a hurdle in its efforts to sell some projects in Hawaii and California.

D.E. Shaw & Co. and Madison Dearborn Capital Partners agreed not to block the planned sale, and the three companies are canceling a December agreement that had called for SunEdison to transfer some assets to them, but was never completed. Maryland Heights, Missouri-based SunEdison outlined the resolution in a bankruptcy court filing Sept. 4 and plans to present it to U.S. Bankruptcy Judge Stuart Bernstein on Sept. 8 for his approval.

A spokesman for SunEdison declined to comment Tuesday and a spokesman for New York-based D.E. Shaw didn’t immediately address an inquiry.

The agreement is the latest twist in SunEdison’s landmark January 2015 acquisition of First Wind Holdings LLC, which made the company the world’s biggest clean-energy developer. As part of the $1.9 billion deal, D.E. Shaw, Madison Dearborn and Northwestern University, the sellers, took on about $336 million in SunEdison debt.

December Deal

SunEdison continued to snap up wind and solar farms around the world last year, amassing $11.7 billion in debt by the end of the third quarter. In December it worked out a deal with the three creditors to wipe out that $336 million in debt. In exchange, SunEdison would give them a portfolio of more than 1 gigawatt of solar projects as well as 12.2 million shares in TerraForm Power Inc., a publicly traded yieldco it founded and still controls.

While the TerraForm shares were transferred, other parts of the deal were never completed. About 148 megawatts of solar projects that SunEdison planned to transfer to D.E. Shaw lost their contracts with utility Hawaiian Electric Co. in February, with the utility citing “SunEdison’s apparently precarious financial condition.”

In April, less than a month before SunEdison filed for bankruptcy, D.E. Shaw and Madison Dearborn sued TerraForm for $231 million after SunEdison allegedly missed some deferred payments as part of the original First Wind deal. TerraForm was a co-buyer in that transaction.

That suit is still pending in New York Supreme Court, where D.E. Shaw and Madison Dearborn most recently argued against TerraForm Power’s attempt to dismiss the case. The dispute isn’t part of SunEdison’s Chapter 11 bankruptcy because it’s a question of contract law, they have said.

The new agreement comes about six weeks after the bankruptcy court approved SunEdison’s planned sale of its equity interests in the 201-megawatt Mount Signal 2 solar project in Imperial Valley to D.E. Shaw for $80 million.

The case is In re SunEdison Inc., 16-10992, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

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