Einhorn's Greenlight Ends Bet on SunEdison's TerraForms

  • Hedge fund sells remaining shares in SunEdison’s yieldcos
  • SunEdison contributed to hedge fund’s second-worst year

Greenlight Capital is no longer betting on SunEdison Inc.’s two TerraForm yieldcos, marking the end of another chapter in its bruising wager on the renewable-energy company.

The New York-based hedge fund run by David Einhorn unloaded its remaining shares in TerraForm Power Inc. and TerraForm Global Inc. in the fourth quarter, according to data compiled by Bloomberg. It sold about 1.5 million shares in TerraForm Power, and about 1.6 million shares in TerraForm Global.

Greenlight exited the TerraForms as they attempt to untangle themselves from SunEdison, which in April filed the largest U.S. bankruptcy of 2016. A sales process to find a new owner, or sponsor, for the yieldcos began last year. In January, Brookfield Asset Management Inc., Canada’s largest alternative asset manager, was announced as the exclusive bidder.

TerraForm Global, a yieldco focused on emerging markets, has 952 megawatts of wind and solar assets, including 307 megawatts in Brazil and 302 megawatts in India, according to a presentation this month. TerraForm Power owns almost 3,000 megawatts of wind and solar farms in OECD countries, including the U.S. and the U.K.

TerraForm Power fell 0.7 percent Wednesday to $11.70 at the close in New York. TerraForm Global gained 1.1 percent to $4.75.

Spokesmen for Greenlight and the TerraForm yieldcos declined to comment. A spokesman for SunEdison didn’t return a call seeking comment.

Hedge funds including Greenlight championed SunEdison’s multi-continent buying-binge in 2015, and in particular the forming of yieldcos -- public holding companies -- to buy its wind and solar farms. The yieldcos let Maryland Heights, Missouri-based SunEdison raise additional cash to expand around the world.

QuickTake Q&A: Yieldcos, Fuel for Energy Projects, Draw Scrutiny

Einhorn was a high-profile SunEdison supporter, riding its sharp rise in 2015 to become the world’s biggest clean-energy developer -- and its even sharper fall into bankruptcy. SunEdison was one of Greenlight’s biggest losers in 2015, when its main fund lost more than 20 percent. The losses on the position contributed to the firm’s second-worst performance since its inception.

Greenlight acknowledged in May its bad SunEdison bet. “Unfortunately, and to our surprise, the patient was already in terminal condition. Obviously, we underestimated the fragility of the situation,” it said in a May note to investors.

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