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Bankrupt Solar Company SunEdison Wants to Sell Its Interests in Terraform Global

July 20, 2016, 2:00 PM UTC
Solar Modules
HAMILTON TOWNSHIP - JUNE 2: Contractors install 1248 photo voltaic modules on top of a Kohl's Department Store roof June 2, 2010 in Hamilton Township, New Jersey. The project is part of a SunEdison Corporation contract with Kohl's, a nation-wide department store. Electricity generated by the solar modules will cut Kohl's usuage on average by 25-30 %. SunEdison, based in Beltsville, Maryland, uses 10-15 types of modules depending on availability. Chinese-made modules are used at this site. Kohl's signed a 20-year contract with SunEdison to receive electricity at reduced rates from the public utility company. State and federal tax incentives help individuals and commercial enterprises cover costs of solar module installations. SunEdison is North America's largest solar energy supplier. (Photo by Robert Nickelsberg/Getty Images)
Photograph by Robert Nickelsberg/Getty Images

Bankrupt solar company SunEdison (SUNE) is looking to sell its interests in Terraform Global (GLBL), the “yieldco” said on Wednesday.

Shares of Terraform Global, which holds renewable energy assets primarily outside the United States, were up 11.1 percent at $3.61 in light premarket trading.

Yieldcos are publicly traded subsidiaries that hold renewable energy assets, including assets bought from their parents. They are backed by long-term power purchase contracts with utilities, allowing them to pay regular dividends.

The companies are in “active discussions” for a joint sale, Terraform Global said in a regulatory filing.

 

Terraform Global, which hasn’t reported results since the quarter ended Sept. 30, said it expects first-quarter revenue of $47 million to $52 million, hurt by unusually low wind in Brazil.

Analysts on average were expecting revenue of $102.3 million, according to Thomson Reuters I/B/E/S.

Terraform Global also said it does not expect to achieve its targeted dividend growth rate for Class A shares.

The company also said on Wednesday its annual filing for 2015 may include a “going concern” note due to risks related to SunEdison’s bankruptcy, but said it had sufficient liquidity to support ongoing operations.

SunEdison’s two publicly traded subsidiaries, Terraform Global and Terraform Power Inc, said in April they were not part of their parent’s bankruptcy process.