TerraForm Global Closes Wind Energy Deal and Sister Company Faces Potential Class Action Suit

TerraForm Global wind energy acquisition

Two of SunEdison’s subsidiaries are making news today.  SunEdison, the world’s largest renewable energy company, has spun off two yieldcos in the last year, TerraForm Power and TerraForm Global.  Yieldcos  bundle renewable and/or conventional long-term contracted operating assets in order to generate predictable cash flows and allocate cash available for distribution (CAFD) each year or quarter to shareholders in the form of dividends.

TerraForm Global was formed to acquire renewable energy assets in emerging markets. Today, the company announced that it has closed on the acquisition from Renova Energia of two operating wind energy projects that were part of the original TerraForm Global IPO portfolio when the Yieldco was spun off this past summer.

The Salvador and Bahia wind energy projects are located in Brazil and generate 294 megawatts (MW) AC of capacity in aggregate. The projects were purchased with a combination of TerraForm Global Class A common stock and cash that was allocated from the TerraForm Global IPO proceeds.

“TerraForm Global is executing on our commitment to deliver high-quality, contracted cash flows to our investors,” said Carlos Domenech, TerraForm Global’s chief executive officer. “We are excited to grow our relationship with Renova and launch our platform inBrazil, one of TerraForm Global’s key markets.”

TerraForm Power was spun off by SunEdison as a yieldco in 2014.  A U.S. law firm has issued a press release that it is ” investigating possible breaches of fiduciary duties related to certain transactions involving TerraForm Power, Inc.  and its controlling shareholder, SunEdison, Inc.”.

The firm says that they are investigating the following:

  • whether TerraForm’s Board of Directors met its fiduciary duties to ensure that these transactions were fair and in the best interests of TerraForm.
  • whether SunEdison abused its position as the controlling shareholder of TerraForm in order to advance its own interests at the expense of TerraForm and its minority shareholders.

The above concerns relate to the joint acquisitions by SunEdison and TerraForm Power of residential solar company Vivint Solar, and U.S. leading wind developer, First Wind.

Tracey Smith About Tracey Smith
Tracey is an accountant and entrepreneur with a passion for nature. This passion is what spurred her interest in renewable energy, and the rest is history as they say. Tracey is a principal in Energy Think Group, the publisher of Solar Thermal Magazine and Tek-Think. She is also the principal at Women's Financial Help Desk. She spends her free time in the outdoors with her horses and dogs. She loves to travel.

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