(Corrects deal value in headline and paragraph 1 to "$1.41
bln", from $2.5 bln". Corrects paragraph 5 to say Brookfield
raised its stake in TerraForm Power to 51 pct for $622 mln, did
not buy 51 pct stake for $1.7 bln)
March 7 Brookfield Asset Management Inc
said on Tuesday it would buy one of the two "yieldcos"
of bankrupt U.S. solar company SunEdison Inc and take
a 51 percent stake in the other, for a total of about $1.41
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
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 for
about $787 million and increases its stake to 51 percent of
TerraForm Power Inc 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
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
Brookfield, which owns over 17,000 megawatts of renewable
energy assets, will replace SunEdison as TerraForm Power's
sponsor once the deal closes. It had a 12.16 percent stake in
TerraForm Power as of Feb. 17, according to Thomson Reuters
As part of the deal, TerraForm Power will issue about 6.6
million shares to SunEdison, which will leave SunEdison with a
higher stake in the unit of 36.9 percent.
SunEdison will exchange its class B shares in TerraForm
Global for 25 percent of TerraForm Global's class A shares.
SunEdison, once the fastest-growing U.S. renewable energy
company, filed for Chapter 11 bankruptcy protection last year
after a short-lived but aggressive binge of debt-fueled
acquisitions proved unsustainable.
Morgan Stanley, Centerview Partners and AlixPartners were
financial advisers to TerraForm Power, while Greentech Capital
Advisors, Centerview Partners, and AlixPartners advised
Rothschild and Ankura Consulting acted as financial advisers
(Reporting by John Benny in Bengaluru; Editing by Sai Sachin