Investors find solar gems in ‘carcass’ of bankrupt SunEdison

THE SPECTACULAR failure of what was once the world’s biggest renewable-energy company has turned into a smorgasbord of wind and solar farms being gobbled up by infrastructure investors, clean-power developers and even a vegan soccer team.

Since filing the largest US bankruptcy of 2016, SunEdison, Inc. has hosted the biggest-ever sale of renewables assets. It’s shed at least $1 billion of assets from Southern California to Chile to India — some through record-breaking deals — including projects that would have died without new owners. With wind and solar supplying more than 11% of global electricity, the company’s debt- induced collapse enabled competitors to strengthen their existing hands or enter new markets.

“Developers have been picking at the carcass,” Nathan Serota, a New York-based analyst at Bloomberg New Energy Finance, said in an interview. “As it turns out, the carcass was not so bad.”

Based in Maryland Heights, Missouri, SunEdison amassed its portfolio by taking advantage of clean-energy’s push into the mainstream. Its financial engineering helped enable wind and solar to make up more than half of all new power-plant capacity in the US in the past decade. In the process, the company piled up $16.1 billion in liabilities by the time it sought court protection from creditors on April 21, a year ago next week.

Its ascent was marked by landmark acquisitions announced in the first seven months of 2015, making SunEdison a key driver for the clean-energy ambitions of some developing countries, including India.

Now, it’s looking at how to make a comeback. After toggling between a wind-down or a reorganization since filing for bankruptcy, it announced last month a rough outline for restructuring. But it’s also sold off so many prized assets and lost key staff that questions remain about what of value will be left.

“They’re not coming back as anything material, just the rump or shadow of their former self,” Swami Venkataraman, a New York-based analyst at Moody’s Investors Service, said last month.

SunEdison didn’t offer any official comment.

BULK DEALS

Whether or not SunEdison prospers, its assets have found loving owners.

Its piecemeal sales process started tentatively, but it soon became clear that bulk transactions were preferred. That meant fewer deals, a plus considering SunEdison had at one point marketed several gigawatts of assets. That favored large companies able to cope with large-scale finance and project development, including the US’ largest independent power producer, NRG Energy, Inc.

“They could look at us with a high degree of transaction-certainty,” Craig Cornelius, NRG’s San Francisco- based senior vice- president of renewables. “Otherwise, they would have needed four different buyers for the same portfolio.”

NRG in November bought about 1.5 gigawatts of wind and solar projects — its biggest-ever clean-power acquisition — for as much as $183 million, depending on certain milestones. That saved three solar farms in Hawaii that a local utility had effectively halted, citing SunEdison’s uncertain status. Hawaii is a new solar state for NRG.

In March, SunEdison oneupped itself with twin deals that would together represent the biggest-ever transfer of operating clean-power plants — 4 gigawatts of wind and solar farms. Those transactions would shift its TerraForm yieldcos to Brookfield Asset Management, Inc., Canada’s largest alternativeasset manager, valuing the two entities at $2.49 billion.

The deals would make Brookfield — the owner of about 10,700 megawatts of clean- energy plants globally — a major solar force. Brookfield today owns a half-megawatt of solar, enough to power just 82 US homes.

SunEdison’s aggressive bids in 2015 helped drive down solar tariffs in India, and its bankruptcy shocked the country that