'For sale' signs up at SunEdison's TerraForm yieldcos

TerraForm Power and TerraForm Global, the two yieldcos created by stricken US renewables giant SunEdison, have both formally put up "for sale" signs as they attempt to map out a future direction.

The yieldcos also said they want to work with their bankrupt parent to settle legal disputes between them.

The two US-listed entities issued identical statements confirming that they have “initiated a process to explore and evaluate potential strategic alternatives to maximize stockholder value, including a merger or sale of its entire business”.

Their options include sale of “all their equity interests as well as alternative structures”, the statements add.

“We are open to considering a transaction involving a new sponsor that would contribute to the stabilisation and future growth of the company’s very attractive platform of generation assets,” said Peter Blackmore, interim CEO of both yieldcos.

That could include “negotiation of new sponsorship arrangements or through assumption of SunEdison’s existing sponsorship agreements. (TerraForm Power/Global are) also taking appropriate steps to operate as an independent company without a new sponsor, if that should become necessary in the short or long term,” added Blackmore.

TerraForm Power owns about 3GW of mostly US-based operating assets. SunEdison’s stake in the business has already reportedly attracted the interest of possible bidders including US hedge fund DE Shaw, Canada’s Brookfield Asset Management and a Chinese investor.

TerraForm Global, which was formed by SunEdison to host international operating assets, has a portfolio of 917MW.

SunEdison finally filed for bankruptcy protection in April under the pressure of servicing debts, after an extraordinary global expansion that saw it become the world’s most ambitious renewable energy firm.

The two yieldcos have not filed for bankruptcy and TerraForm Global in April lodged a $231m lawsuit against its parent.

The latest statement from the two yieldcos said it was in their best interests to seek a “prompt settlement of all intercompany claims and defenses to facilitate the strategic review process.

“We are committed to negotiate actively with SunEdison to resolve intercompany matters consensually on arm's-length terms as soon as possible, although we stand ready to enforce our rights in litigation if necessary."

SunEdison's own global asset sales have so far included 2.1GW in the US to NRG Energy, with Greenko said to be poised to buy 438MW from it in India.