, a yieldcoaffiliate of bankrupt renewable energy developer , may help market itssponsor's interest in the holding company as part of a "jointly-supportedsales process," according to SEC filings.
Theyieldco, which owns a 917-MW portfolio of wind and solar power projects inseven countries, said it has not made a decision to support any particular bidder,structure or transaction. The company's holdings, more than half of which arewind projects, are in Brazil, Uruguay, South Africa, India, Malaysia, Thailandand China.
Thefate of TerraForm Global, along with SunEdison's other yieldco, , has beenone of the centralquestions in the developer's $16 billion bankruptcy. The companies were not listed intheir sponsor's Chapter 11 filing in April and are seen as essential to SunEdison'sfundraising efforts.
Together,the companies account for between 66% and nearly 100% of SunEdison's assets,which have been estimated at up to $1.5 billion, CreditSights analysts GregJones and Andy DeVries wrote in a July 18 note.
TerraFormPower and TerraForm Global have market values of $958.8 million and $379.3million, respectively, according to S&P Global Market Intelligence. SunEdisonowns 35% of the economic interest and 84% of the voting interest in TerraFormPower and 36% of the economic interest and 98% of the voting interest inTerraForm Global, according to an April court filing.
Capitalizingon the value of SunEdison's class B yieldco shares represents one of the"few options" available to creditors, Jones and DeVries said.
TerraFormGlobal shares were up 9.23% at $3.55 at about 12:40 p.m. ET on July 20. Theyieldco's senior unsecured notes due in 2022, its only outstanding bonds, weretrading for around 97 cents on the dollar, up about 3 cents, according toS&P Global Market Intelligence.
TerraFormPower shares rose 18% on June 29 after Brookfield Asset Management Inc. it took a 12.13% stake in thecompany and may pursue all of SunEdison's shares. TerraForm Power's unsecurednotes due in 2023 and 2025 are trading for 99.25 cents and 98.25 cents on thedollar, respectively, according to S&P Global Market Intelligence.
Thereis "an elevated probability" that Brookfield Renewable Partners LP, a yieldco sponsored byBrookfield Asset Management, "could be the ultimate owner of TerraFormPower," Jones and DeVries said.
TerraFormGlobal, in unaudited financial filings on July 20, said it had $769 million inunrestricted cash at the end of June, down from $1.06 billion at the end of thirdquarter 2015. The company has not filed financial reports for 2015 or for thefirst quarter of 2016, drawing warnings from Nasdaq and bondholders.
Forthe first quarter, TerraForm Global estimated its net loss at about $4 million,adding that it had approximately $45 million in cash available fordistribution. For the second half of 2015, the company reported a net loss ofbetween $335 million and $350 million and between $56 million and $64 millionin cash available for distribution.
AvondalePartners LLC senior analyst Michael Morosi on July 20 raised his price targeton TerraForm Global to $5 per share. "We continue to view the assets asmaterially undervalued and governance risk issues are abating," Morosiwrote in a note. He estimated that TerraForm Global is carrying around $1.23billion in debt.
TerraFormGlobal's estimated second-half net loss included a $231 million contingent lossassociated with projects in India that are at the center of a lawsuit theyieldco filed againstSunEdison.
Theprojects in India are unlikely to be transferred to TerraForm Global, in partbecause some appear to have been cross-funded or cross-collateralized inviolation of project lending agreements, TerraForm Global said, adding thatSunEdison is apparently marketing some of the projects to third parties.