D.E. Shaw and China's GCL looking to buy TerraForm Power: reports

Interest in SunEdison’s controlling stake in yieldco TerraForm Power is heating up, with US hedge fund D.E. Shaw and a unit of China’s Golden Concord (GCL) reportedly considering bids, adding to a list of would-be buyers that already includes Canada’s Brookfield Asset Management and Appaloosa Management.

In the latest twist in the post-bankruptcy saga of SunEdison, New York-based D.E. Shaw, a long-time associate and partial owner of SunEdison, is actively mulling a bid for the Class B shares in TerraForm Power, Reuters reported.

The Class B shares are SunEdison’s single most valuable asset at this point, giving it 84% of the voting rights in TerraForm Power. The yieldco owns nearly 3GW of operating wind and solar capacity, most of it in the US, and carries a market capitalisation of nearly $1.9bn.

D.E. Shaw has quietly emerged as a major force in US renewables in recent years, and is the principal owner of Deepwater Wind, the developer behind the Block Island offshore project.

Meanwhile, last week Bloomberg reported that GCL intends to bid for SunEdison’s Class B shares in TerraForm, which would blast the Chinese company into an unusual position of prominence in the downstream North American renewables market.

Both the Reuters and Bloomberg stories cite unnamed sources. But clearly GCL has been kicking the tyres at SunEdison, as on 29 August it emerged that GCL-Poly, a GCL unit, will buy SunEdison’s polysilicon and ingot production assets for $150m.

Brookfield Asset Management, a major owner of Canadian hydro assets, has already stated its interest in TerraForm’s Class B shares, which it intends to bid on jointly with US hedge fund Appaloosa Management.

Unlike SunEdison itself, the company’s two yieldcos – TerraForm Power and TerraForm Global – have not filed for bankruptcy.

The recent surge of interest in TerraForm Power could help SunEdison fetch a higher price for its Class B shares, helping SunEdison investors recoup more of their losses. The yieldco’s stock price has risen 48% in the last three months, to $12.67, though it remains far off its $40-plus peak in mid-2015, before SunEdison’s collapse began.

But SunEdison has not yet formally asked for court approval to sell its stake in TerraForm Power, and the company has suggested it may try to reorganise around its yieldcos.

The sale of SunEdison’s 5GW of solar and wind assets around the world – being conducted largely on a piecemeal basis – amounts to the largest-ever sale of renewables assets.

Earlier this month it emerged that SunEdison hopes to sell 14 US solar projects totaling nearly 1.7GW of capacity to NRG Energy.