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China's Golden Concord said to compete for SunEdison yieldco

[NEW YORK] Golden Concord Holdings Ltd, the Chinese clean-energy group, is seeking to acquire assets from bankrupt US renewable-energy giant SunEdison Inc, people familiar with the company's plans said.

Golden Concord is planning to bid for SunEdison's controlling stake in TerraForm Power Inc, which owns operating power plants, according to the people, who asked not to be identified because they're not authorised to speak publicly.

That would pit Golden Concord against a planned joint offer from Canada's biggest alternative-asset manager, Brookfield Asset Management Inc, and billionaire David Tepper's Appaloosa Management LP hedge fund.

Golden Concord's Hong Kong-traded power unit, GCL New Energy Holdings Ltd, is interested in acquiring other SunEdison assets including US solar farms, the people said.

While SunEdison hasn't yet made a motion to sell the stake in Manhattan bankruptcy court, the appearance of a rival could mean a run-off for who will be the first bidder in a court-supervised auction.

Such stalking-horse bidders win protections, such as breakup fees, if they lose out. Golden Concord's interest is also a sign that SunEdison, which indicated this week that it may still reorganise around its yieldcos, could have to part with them in the best interests of creditors.

TerraForm Power has a market valuation of about US$1.6 billion, making it SunEdison's most valuable standalone asset.

"It could help Golden Concord get some overseas business at a discount, probably increasing their profit," Wang Haisheng, executive general manager of the equity division at Ping An Securities Co, said by phone Friday.

"For big companies that have sufficient capital, seeking opportunities globally is a good way to allocate assets."

A representative for Golden Concord didn't reply to e-mailed questions. Spokesmen for GCL New Energy, SunEdison, Brookfield and TerraForm declined to comment.

Chinese companies have announced US$11.3 billion of foreign power and alternative energy acquisitions in the past year, according to data compiled by Bloomberg, part of a record wave of overseas dealmaking.

Golden Concord is separately competing for control of K-Electric Ltd, the US$2.4 billion Pakistani utility that has also drawn interest from Shanghai Electric Power Co and Engie SA, people with knowledge of the matter said earlier this month.

GCL New Energy plans to add about 100 megawatts of overseas solar projects this year, mainly in the US, said Kexin Zhu, a Hong Kong-based analyst from China Securities (International) Finance Holding Co, citing executives' remarks during a conference call this week.

The unit employed about 20 people in the US as of February to evaluate potential projects, he said by phone Wednesday. GCL New Energy agreed in February to pay US$4.9 million for development rights to 68.5 megawatts of solar projects in North Carolina.

SunEdison, which filed for bankruptcy in April with US$16 billion in liabilities, is currently selling more than 5 gigawatts of wind and solar farms around the world, in the biggest-ever sale of clean-energy assets.

As part of a global expansion effort that made it the world's biggest clean-energy developer, SunEdison formed two publicly traded holding companies to buy and own operating power plants: TerraForm Power and sister company TerraForm Global Inc.

SunEdison owns controlling stakes in both through its Class B voting shares. The three companies are working together to put those shares up for sale, according to a statement in July.

An auction for the TerraForm Power Class B shares may begin as soon as next month, people with knowledge of the matter said earlier. Rothschild & Co is advising SunEdison on the sale processes.

SunEdison Class B shares in TerraForm Power give it approximately 84 per cent of the voting rights while holding only about 35 per cent of the total shares outstanding, according to a July 26 regulatory filing.

Brookfield said in a June filing that it had expressed interest in acquiring SunEdison's TerraForm Power stake.

And in July, the Canadian company said it had joined forces with Appaloosa to bid for the TerraForm Power shares. Brookfield is the biggest holder of TerraForm's Class A stock, with 12.13 per cent, according to data compiled by Bloomberg.

Appaloosa is third-biggest, with 9.5 per cent. Other prominent holders include DE Shaw & Co and BlackRock Inc.

Brookfield reiterated its interest earlier this month.

"We think we would be a really good sponsor for that business," Sachin G Shah, chief executive officer of the company's Brookfield Renewable Partners unit, said during an Aug 4 earnings call.

"We bring that operating expertise, the development expertise. We're in the same geographies as that company. And we think we can be helpful to the situation, and that is really our strategy."

BLOOMBERG