Hedge fund D.E. Shaw has offered to buy SunEdison's stake in a California solar power project for $80 million.
SunEdison filed for bankruptcy protection in April, awash in debt and with i ts finances under investigation. Owner of an array of alternative power projects in various stages of development, the company agreed to start selling some assets while it weighs whether to reorganize or shut down after a series of sales.
Court records reveal an army of advisers has been raking through SunEdison's portfolio, seeking to put together deals that would make a dent in the company's $8 billion pile of debt.
DESRI MS2 Development, L.L.C., an affiliate of D.E. Shaw Renewable Investments LLC, has made an offer for SunEdison's stake in the so-called Mt. Signal 2 Project, a photovoltaic-energy project in Imperial Valley, Calif. If the Mt. Signal 2 stake goes to D.E. Shaw in a private sale, SunEdison will net some $70 million, court papers say.
However, there were multiple offers, including 22 prospective purchasers interested in a larger portfolio of assets, and that could spur the bankruptcy judge to order an auction.
In the event of an auction, the D.E. Shaw affiliate will lead the bidding, but its offer falls by $10 million, according to court papers.
SunEdison is urging a private sale, noting that Mt. Signal 2 was part of a package of projects that bondholders were set to take over in exchange for canceling some debt. Affiliates of D.E. Shaw, Madison Dearborn Capital Partners IV, L.P., and Northwestern University expected to acquire the project and others just months before the bankruptcy filing, as payment on $215 million SunEdison owed them.
The swap never took place. Instead, SunEdison filed for chapter 11 bankruptcy protection.
However, D.E. Shaw, which manages $37 billion and is among the largest hedge-fund companies in the world, is familiar with the project and has the funds to close a deal quickly, SunEdison noted. That is important, according to SunEdison, because interconnection rights granted by California authorities expire in August, a complication that could make the project less valuable if the sale is delayed for an auction competition.
The buyer is "highly motivated to proceed to an expeditious closing," wrote Hy Martin, a SunEdison executive responsible for mergers and acquisitions. Other prospective buyers would be unable to close a deal as quickly, Mr. Martin wrote in court papers.
Separately, SunEdison last week sought approval of a sale of its stake in a related project, Mt. Signal Solar 3, which would add $5 million to its bankruptcy coffers.
In addition to the energy projects, investors are eyeing SunEdison's stakes in its former subsidiaries, TerraForm Power Inc. and TerraForm Global Inc. The companies are separate, solvent and publicly traded, owning projects that SunEdison brought to completion.
Brookfield Asset Management went public recently about its interest in a takeover, after picking up almost 25% of TerraForm Power's stock.
While the deal talks wind on, major questions remain for SunEdison, a former star of the stock market that is now under the control of outside restructuring advisers. Top leaders have departed, including former chief executive Ahmad Chatila. The company is also the subject of probes by the Justice Department and Securities and Exchange Commission, as well as an internal investigation prompted by whistleblowers.
Write to Peg Brickley at peg.brickley@wsj.com
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