D.E. Shaw, Madison Dearborn agree not to block the sale of SunEdison assets


Assuming that there are no objections filed, tomorrow a bankruptcy court judge in Southern New York is expected to quietly sign an order which will untangle one aspect of the financial and legal mess that is the SunEdison bankruptcy.

In December 2015, D.E. Shaw and Madison Dearborn were promised more than 1 GW of renewable energy projects along with shares in yieldco TerraForm Power and other payments, in exchange for cancellation of debt that SunEdison took on in acquiring wind First Wind.

According to Bloomberg, the handing over of the TerraForm Power shares was completed, but the transfer of projects was not. To further complicate matters, 148 MW of solar projects in Hawaii that SunEdison planned to transfer to D.E. Shaw lost their power contracts, with off-taker Hawaiian Electric Company citing SunEdison’s “apparently precarious” financial position.

Following SunEdison’s bankruptcy, Madison Dearborn and D.E. Shaw’s interest in these companies has been a roadblock for companies seeking to buy out parts of the SunEdison empire. To address this, on Sunday, lawyers for SunEdison and the two firms quietly filed an order rescinding the December purchase and sale agreement.

If there are no legal objections to the agreement filed today, a bankruptcy court judge can sign the order tomorrow. The full dimensions of SunEdison’s compensation to the two companies for their cooperation are not clear; however the bankruptcy court has approved the sale of SunEdison’s stake in the 150 MW Mount Signal PV project to D.E. Shaw.

There is no shortage of interest in SunEdison’s projects. Today SunEdison CEO and Chief Restructuring Officer John S. Dubel filed a form with financial regulators indicating that as of late June the company had received around 100 bids for its assets and business lines.

The filing also estimates $1.25-1.7 billion in gross proceeds from the sale of these assets, but notes that this does not take into account project-level debt and other third party liabilities and obligations.

Some of these asset sales, such as GCL’s acquisition of SunEdison’s legacy polysilicon and cell businesses, are moving forward. However, the company’s notes that some bids have been withdrawn and that some bids are not compatible with others as they cover the same portions of the same projects.

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