SunEdison offloads Japanese assets, assesses Vivint deal options

The tumultuous past few months for U.S. renewable energy developer SunEdison look set to continue long into February following the news that the firm has sold its Japanese arm and is currently seeking the "least bad" option in its attempts to close its controversial acquisition of U.S. residential solar company Vivint Solar.

This week, Thai oil company Bangchak Petroleum snapped up SunEdison Japan Corporation, SunEdison Japan Debt Financing Pte Ltd, and SunEdison TK Invester Pte Ltd for JPY 9.63 billion ($80 million).

The acquisition comprises a 198 MW solar PV portfolio in Japan and has been driven by SunEdison’s need to improve its balance sheet after a chastening 2015 that saw the company’s workforce diminish by around 15%.

SunEdison’s 2015 shopping spree – in which the firm snapped up Pennsylvania’s Solar Grid Storage and two large wind power companies – resulted in a 90% fall in share value over the last nine months, with stocks closing this week at $3.02 compared to $33.45 last summer.

The headline acquisition last year, however, was the firm’s $1.9 billion purchase of Vivint Solar, one of the leading residential solar installers in the U.S. The intention was for SunEdison to immediately flip 50% of that deal on to the books of its yieldco, TerraForm Power Inc., but various modifications of the terms of the deal – not to mention an effort by billionaire hedge-fund manager David Tepper of Appaloosa Management to block the transaction in the courts (Tepper owns a 9.5% stake in TerraForm and has labeled the deal "fundamentally unfair") – have put that plan in jeopardy.

Now, SunEdison may have to find another buyer for this portion of the Vivint portfolio, or seek ways to raise the required $800 million themselves. "They need $800 million one way or another, whether from TerraForm or at the SunEdison level," Avondale Partners analyst Michael Morosi told Bloomberg.

The initial terms of the transaction would have seen TerraForm agree to pay $922 million for a portion of the Vivint Solar portfolio – the equivalent of around 523 MW of rooftop PV systems installed across the U.S. The revised and reduced terms are for 470 MW of assets at a cost of $799 million, and holders of Vivint stock will be allowed to accept additional SunEdison stock or cash consideration.