Bankrupt renewable energy developer SunEdison Inc. has been cleared to sell its commercial and industrial business to MyPower Corp., an investor and power project manager, for $15 million.
Through its commercial and industrial, or C&I, business, SunEdison developed behind-the-meter solar projects on rooftops and carports as well as "community" projects that sell electricity to large organizations such as municipalities, school districts and housing authorities. After selling off certain assets, the C&I pipeline includes approximately 36 early-stage projects, a company executive told U.S. Bankruptcy Judge Stuart Bernstein on Jan. 5. Those projects require interconnection and other contractual payments by the end of January, the executive said, and without a quick sale, the value of the portfolio could be lost.
The sale agreement calls for MyPower to pay $5 million into an escrow account that is being used to incentivize the company to help SunEdison complete C&I projects that it agreed to sell to Edison International subsidiary SoCore Energy LLC, AES Corp. affiliate AES Distributed Energy Inc. and Onyx Development Group LLC. Provided MyPower meets certain obligations, the purchase price payable to SunEdison will be $10 million, according to filings in the U.S. Bankruptcy Court for the Southern District of New York.
"The consideration provided by the Buyer ... constitutes the highest or otherwise best offer" for the assets, which include Forefront Power LLC, a project holding company, as well as contracts and intellectual property, Bernstein said in a Jan. 26 order.
SunEdison filed for bankruptcy in April 2016, the victim of a debt-fueled buying spree and financial and accounting practices that were creative at best. The company, which has been under investigation by the SEC and U.S. Department of Justice, is trying to arrange a deal for its most valuable assets, the yieldcos TerraForm Power Inc. and TerraForm Global Inc. SunEdison's 35% equity interest in the TerraForm companies is valued at around $870 million, Rothschild Inc. Managing Director Homer Parkhill said in a Jan. 11 court filing. The holdings companies are negotiating exclusively with Brookfield Asset Management Inc.
After repaying $251 million of debtor-in-possession financing, Parkhill estimated SunEdison could generate $1.2 billion in sales proceeds. The company faces approximately $4.6 billion in secured and unsecured claims. "Unfortunately, the facts of the Debtors' situation lead to the inevitable conclusion that the ability to pay all creditors and return any value to equity holders is entirely unlikely," Parkhill said.