SunEdison sped up $1b Goldman deal to reassure investors
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.