SunEdi­son sped up $1b Gold­man deal to re­as­sure in­vestors

The Pak Banker - - COMPANIES/BOSS -

When SunEdi­son Inc. lost a quar­ter of its mar­ket value in a sin­gle day this month, Chief Fi­nan­cial Of­fi­cer Brian Wuebbels knew he had to do some­thing.

The world's big­gest devel­oper of wind and so­lar farms is down more than 50 per­cent in the past month, in­clud­ing a 25 per­cent plunge Aug. 6 af­ter re­leas­ing its sec­ond-quar­ter re­sults.

One of the big con­cerns for in­vestors is liq­uid­ity. With po­ten­tial plans for more than 50 gi­gawatts of power plants around the world, SunEdi­son needs lots of money. To demon­strate that the Mary­land Heights, Mis­souri-based com­pany can pay for all those wind tur­bines and so­lar pan­els it plans to in­stall, Wuebbels fast­tracked sev­eral deals, in­clud­ing a $1 bil­lion fund with Gold­man Sachs Group Inc.

"Mar­ket sen­ti­ment shifted very quickly," Wuebbels said in an in­ter­view Wed­nes­day at Bloomberg's head­quar­ters in New York. "We wanted to re­as­sure in­vestors that we'll be O.K."

On Mon­day, SunEdi­son an­nounced de­tails of the in­vest­ment ve­hi­cle with a Gold­man Sachs-man­aged fund, which will build and buy clean power plants. Wuebbels said the cap­i­tal will help the com­pany meet its fu­ture growth tar­gets, and un­der cer­tain con­di­tions ex­pand by another $1 bil­lion.

SunEdi­son also an­nounced plans Tues­day to raise $650 mil­lion by selling pre­ferred shares. Last week, it sold half of a 420-megawatt so­lar pro­ject in Utah to Do­min­ion Re­sources Inc. for $500 mil­lion. Those trans­ac­tions had been in the works for months, and in re­sponse to the "very rapid shift" in the mar­ket, "we ac­cel­er­ated those ac­tiv­i­ties," Wuebbels said Wed­nes­day.

The moves haven't had much ef­fect on the stock. The shares slipped to $13.35 on Aug. 11, a 19-month low, and were trad-

it may ing at $13.75 at 11:08 a.m. in New York.

"They did shore up their bal­ance sheet, for now, but fu­ture fi­nanc­ing needs may be more dif­fi­cult," Ben Kallo, an an­a­lyst at Robert W. Baird & Co. in San Fran­cisco, said in an in­ter­view. He re­duced his 12-month price tar­get Wed­nes­day to $20 from $35.

SunEdi­son has grown rapidly, through ac­qui­si­tions and by cre­at­ing two pub­licly listed com­pa­nies that own and op­er­ate the power plants it builds, Ter­raForm Power Inc. and Ter­raForm Global Inc. That busi­ness struc­ture may also be in­tim­i­dat­ing in­vestors, Kallo said.

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