US-based SunEdison Inc has decided to sell 425 megawatt of solar projects in India to its TerraForm Global Inc unit for $231 million (about Rs 1,530 crore).
The world's largest renewable energy developer said it received $150 million on November 20 and will get the remaining by December next year. The company used $95 million from the sale proceeds to repay almost all of a margin loan to Deutsche Bank AG, it said in a statement.
"We believe a significant portion of the recent volatility around the company and its subsidiaries has been attributed to the margin loan," SunEdison CEO Ahmad Chatila said.
The sale is part of the company’s efforts to reduce debt and soothe investors’ concerns that have dragged its shares sharply lower over the past year. Shares of SunEdison surged 37 per cent on the New York Stock Exchange after the deal was announced on Tuesday but are still down 88 per cent from a one-year high.
The transaction comes after the company scrapped a proposed deal to buy the India assets of Singapore-based Continuum Wind Energy Ltd, which owns 412.5 MW of wind energy projects and is controlled by Morgan Stanley Infrastructure, an infrastructure-focused private equity fund.
SunEdison grew at a breakneck speed with acquisitions across emerging markets but has lately started showing signs of strain. Terraform had a disappointing market float early this year and the firm had said last month it is layoff off part of its workforce.
The value of the deal with TerraForm excludes project debt, which the unit will assumed once the acquisition is completed.
These projects will replace a portion of the projects that were part of TerraForm's initial portfolio. “This transaction provides higher yields replacing lower-yielding IPO projects that were intended to be acquired through M&A and is consistent with our strategy to focus on organic growth provided by our sponsor (SunEdison),†TerraForm CEO Brian Wuebbels said.
SunEdison operates solar plants in India with generating capacity of about 450 MW. It has another 800 MW of capacity under development. Early this month, SunEdison had bid aggressively for state-run utility NTPC's 500 MW project in Andhra Pradesh. It had bid to provide power at a price as low as Rs 4.63 a unit.
An emailed query to a SunEdison spokesperson seeking details of the projects it is left with in India did not elicit any response by the time of filing this article.
Founded in 1959, SunEdison develops, finances, installs, owns and operates renewable power plants. TerraForm owns solar, wind and hydro projects in emerging markets.