By Tom Corrigan
SunEdison Inc. hopes to file a bankruptcy-exit plan by the end of March, after reaching deals to sell its two publicly traded yieldcos and to clear up legal obstacles that have complicated the sale.
During a bankruptcy court hearing Tuesday in New York, SunEdison Chief Executive John Dubel told Judge Stuart Bernstein that he expects SunEdison will file a chapter 11 plan by March 29, the expiration date of the company's exclusive right to file such a plan.
Untangling SunEdison from the yieldcos is an important step forward, allowing SunEdison to turn its attention to finalizing the chapter 11 plan that will detail how it proposes to pay creditors and ultimately exit bankruptcy.
"Without a doubt, this is the most significant development to date in the case," Anthony Clark, a lawyer for SunEdison, told Judge Bernstein Tuesday.
Under two deals announced Tuesday, Canada's Brookfield Asset Management will pay $787 million in cash to buy TerraForm Global Inc. and become the sponsor for TerraForm Power Inc., with 51% ownership of the company.
TerraForm Global and TerraForm Power, the so-called yieldcos, are publicly traded offshoots of SunEdison that bought its renewable energy projects and fed cash to SunEdison's investors. TerraForm Global owns projects in Brazil, China, India and other emerging markets, and TerraForm Power held projects in the U.S., Canada, U.K. and Chile.
SunEdison's stakes in TerraForm Power and TerraForm Global are its most valuable assets. Except for the TerraForm stakes, many of SunEdison's alternative-power projects have been sold, bringing in cash far short of what is needed to cover a multibillion-dollar pile of debt.
The deals are still subject to a range of shareholder, regulatory and court approvals and aren't expected to close until the second half of 2017.
Mr. Clark, the SunEdison lawyer, said in court Tuesday that SunEdison has reached settlements with the yieldcos resolving a morass of intercompany disputes stemming from the complex legal and financial ties between the yieldcos and their parent. The settlements are the product of months of negotiations and help clear the way for a sale to move forward.
Mr. Clark said he expects to file papers asking for court approval of the settlements by the end of the week.
Lawyers for SunEdison's unsecured creditors have complained that they are being kept in the dark as SunEdison and secured lenders make decisions about asset sales and strategies that ultimately will determine how much suppliers, junior bondholders and other lower-ranking creditors can expect to recover.
"Your Honor, it's time to really get us involved in these conversations, " Matthew Barr, a lawyer for the official committee representing SunEdison's unsecured creditors, said in court Tuesday.
Lawyers for SunEdison denied they have frozen the creditors' committee out of negotiations but agreed to share with the committee a preliminary draft of SunEdison's bankruptcy-exit plan.
SunEdison filed for chapter 11 bankruptcy protection last year, hit with a wave of lawsuits and investigations that called into question its accounting practices and the validity of a business model built around a growth binge.
--Peg Brickley and Joshua Jamerson contributed to this article.
Write to Tom Corrigan at tom.corrigan@wsj.com
(END) Dow Jones Newswires
March 07, 2017 14:18 ET (19:18 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.- - 02 18 PM EST 03-07-17
