TerraForm, SunEdison settlement may be imminent

TerraForm Power (TERP) is on the clock to settle its outstanding issues with its sponsor, SunEdison, before their memorandum of understanding (MOU) runs out on Friday – but TERP officials seemed bullish on the prospects of getting a deal done.

Settlement talks between the two parties are currently continuing in the shadow of another looming deadline – March 6. That’s when the clock runs out on TERP’s exclusivity agreement with Brookfield Asset Management, and the yieldco’s search for a new sponsor in the wake of SunEdison’s collapse would continue.

The exclusivity agreement had originally been scheduled to lapse today before the March 6 extension. According to TERP officers, the company has had plans in place since August to operate as an independent entity should negotiations with Brookfield break down, but it does not anticipate such an eventuality at press time.

Any settlement of the outstanding issues with SunEdison would be subject to approval by Judge Stuart M. Bernstein of the United States Bankruptcy Court, Southern District of New York, which is overseeing the SunEdison bankruptcy.

Similarly, any TERP agreement with Brookfield or another suitor would be subject to approval by SunEdison.

A sign that deals could be coming ever closer came yesterday, when Brookfield filed a Schedule 13D with the U.S. Securities and Exchange Commission indicating it currently holds 37.11% of TERP’s stock. While that is clearly not an ownership stake, the fact that Brookfield is increasing the number of shares it’s purchasing so close to TERP’s call with investors may indicate confidence that the deals will be done soon.

TERP offered no updates on its 2017 estimates, citing its exclusivity agreement with Brookfield as the reason.

For the best coverage of the TerraForm/SunEdison/Brookfield saga anywhere, click here.