Since SunEdison was taken over by restructuring expert John Dubel, the company has worked to distance itself from its two yieldcos, including announcing plans to sell its stake in both. Today that process went a step further, with yieldco TerraForm Power reporting that it received a letter from SunEdison “purporting to terminate” an agreement to pay interest on TerraForm’s notes.
In 2014 SunEdison agreed to pay interest on TerraForm’s notes, as part of what TerraForm calls a “suite of contemporaneous documents comprising SunEdison’s sponsorship of TerraForm Power”. Under this agreement, which was restated in January 2015, SunEdison agreed to pay a portion of scheduled interest payments on bonds due 2023 and 2025 through August 2017.
Upcoming interest payments total $24 million in 2016 and 2017, although it is unclear what portion of this SunEdison agreed to pay.
TerraForm says that it is contesting the unilateral termination of this agreement, but until the matter is resolved it will make the full payments with current funds and cash from operations.