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  • Writer's picturePacific Sun Technologies

Brookfield to take control of SunEdison units for $1.41 billion

The headquarters of SunEdison is shown in Belmont, California April 6, 2016.

The headquarters of SunEdison is shown in Belmont, California April 6, 2016.


Brookfield Asset Management Inc (BAM.N) (BAMa.TO) said on Tuesday it would buy one of the two "yieldcos" of bankrupt U.S. solar company SunEdison Inc (SUNEQ.PK) and take a 51 percent stake in the other, for a total of about $1.41 billion.

Canada's largest alternative-asset manager is increasing its holding in TerraForm Power after first reporting a stake in June, when it called the SunEdison unit an "attractive investment opportunity".

Yieldcos are publicly traded units that hold renewable energy assets such as solar power plants and wind farms, including those bought from the sponsor or the parent company.

They have long-term agreements to sell power, giving them stable cash flows, but they are dependent on the transfer of assets from their parents to increase dividends.

Brookfield will acquire TerraForm Global Inc (GLBL.O) for about $787 million and increase its stake to 51 percent of TerraForm Power Inc (TERP.O) for $622 million.

Brookfield will also assume about $455 million of TerraForm Global's debt and pay $5.10 per TerraForm Global class A share, which represents a 20 percent premium to the stock's Monday closing price.

TerraForm Global owns or has contracts to acquire 952 megawatts of wind and solar power in Brazil, India, China, South Africa, Thailand, Malaysia and Uruguay.

TerraForm Power class A shareholders will get $11.46 per share in cash, below the stock's Monday close of $11.59.

TerraForm Power owns about 2,967 megawatts of solar and wind assets in the United States, Canada, the United Kingdom and Chile.