In mid-July, SunEdison's stock was over $30 per share, and had been rising since the first of the year. Looking back over the last nine months since it had announced the acquisition of First Wind, the company had little reason to question an ongoing series of aggressive expansions and acquisitions.
On July 15, the company entered into a $250 million deal to acquire a 16% share of Brazilian developer Renova Energia. In an associated deal, yieldco TerraForm Global would acquire 2.7 GW of Brazilian wind and hydro projects. To pay for this, SunEdison was planning on issuing new shares.
Today SunEdison announced that it has let the investment in Renova and acquisition of these projects lapse, as one of a number of deals that it has cancelled in the last few months.
The company's troubles started only days after signing the Renova deal, as SunEdison stock began a nosedive less than a week later, and stock prices remain under $4 per share four and a half months later.
Their whole acquisition strategy, growth strategy was based on the assumption that their stock value would keep growing, Mercom Capital CEO Raj Prabhu told pv magazine.
By early October, SunEdison had made plans to lay off 15% of its global workforce, had halted drop-downs of projects into its yieldcos, and had taken a number of other measures to scale back its acquisitions and raise money.
This included cancelling plans to buy Chilean developer Latin American Power and its portfolio of Chilean wind and hydro plants. Right now they have to go back and literally clean the house, so they can preserve their cash, notes Prabhu.
However, SunEdison's involvement with Renova has not ended. Under the first phase of the transaction with Renova, SunEdison agreed to buy 141 MW of wind and small hydro projects and exchange 195 MW of wind power assets.
The wind transaction concluded in September, and Renova says the small hydro plants will be transferred as soon as the conditions precedent are complied with. Additionally, a 50-50 joint venture between Renova and SunEdison to develop, own and operate 1 GW of solar projects in Brazil is still ongoing.