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UPDATE 1-Brookfield Asset proposes to take 50-60 pct stake in TerraForm Power

Published 2016-11-18, 10:09 a/m
© Reuters.  UPDATE 1-Brookfield Asset proposes to take 50-60 pct stake in TerraForm Power
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Nov 18 (Reuters) - Brookfield Asset Management Inc BAMa.TO proposed on Friday to take a 50-60 percent stake in bankrupt solar company SunEdison Inc SUNEQ.PK unit TerraForm Power Inc TERP.O , a week after it expressed interest in buying the "yieldco".

The cash offer of $13 for class A and class B shares of TerraForm Power is nearly in line with the class A stock's Thursday close of $13.01. company's shares have risen 48.7 percent since Brookfield took a stake in the company on June 29, when it expressed interest in buying SunEdison's stake in TerraForm.

Yieldcos are publicly traded units that hold renewable energy assets, including those bought from the parent company.

The asset manager also said it was prepared to make an offer for SunEdison's other unit TerraForm Global Inc GLBL.O .

Brookfield said last week it had met with TerraForm Power and TerraForm Global to discuss options for a deal. option included Brookfield replacing SunEdison as the sponsor of the yieldcos, keeping them as listed entities and purchasing their class A and class B shares.

Brookfield had said it could alternatively purchase the two yieldcos for cash.

Canada's largest alternative-asset manager's latest offer comes after the yieldcos said on Tuesday they had requested bondholders to waive financial statement reporting requirements. the bondholders agree to the waiver the yieldcos could incur additional costs and covenant restrictions, limiting their ability to raise capital. On the other hand if the reporting requirements are not waived, the yieldcos face a potential default on bonds necessitating bankruptcy protection.

Brookfield said on Friday it was prepared to act as an interim sponsor of the yieldcos, starting immediately, for a period of up to six months.

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