A unit of American solar company SunEdison, TerraForm Power has this week filed for an initial public offering (IPO) in an effort to raise some $50 million for investing in the creation of more solar PV power plants.
Taking its cue from NRG Energy Inc, which last year listed a unit holding of its energy assets and saw shares in the business gain 73% since going public, SunEdison hopes the move will enable TerraForm Power to profit from new revenue streams.
SunEdison CFO Brian Wuebbels remarked last year that TerraForm could eventually be valued at close to $1 billion based on cash flow, with the unit operating as a "yield co" for SunEdison, helping the parent company bundle up existing solar power plants and then sell them off as separate entities.
The IPO filing could see TerraForm Energy own and operate its own solar assets under lengthy and often lucrative power purchase agreements (PPAs) with interested utilities. Cash that is generated from this yield co approach would then be paid out as dividends to shareholders, with any excess capital plowed into the creation of new solar PV plants.
TerraForm confirmed in a filing with the U.S. Securities and Exchange Commission this week that it will operate any solar plants it acquires from SunEdison and other parties, with Goldman Sachs & Co, Barclays and Citigroup underwriting the offering.
The company has not revealed what the expected share price will be, nor how many shares it intends to sell.