Published on January 19th, 2015 | by Joshua S Hill3
SunEdison Raises $590 Million For First Wind Acquisition
January 19th, 2015 by Joshua S Hill
American solar energy giant SunEdison announced last November its intention to acquire renewable energy company, First Wind, in a deal worth $2.4 billion, that will subsequently result in SunEdison becoming the world’s largest renewable energy development company.
SunEdison, primarily known for its solar energy portfolio, announced in a press release on its website late last week that it had raised $590 million to help fund its acquisition of First Wind.
“These funds are a major step forward in our acquisition of First Wind,” said Brian Wuebbels, Chief Financial Officer of SunEdison. “Our ability to secure this funding, while preserving the upside in value from our ownership in TerraForm Power, speaks to the strength of the growth platform we are creating.”
The funds acquired so far amount to almost a quarter of what will be ultimately necessary, but some analysts are not content with SunEdison’s current situation.
At the same time, SunEdison made two more announcements, the first being its intention to build India’s largest solar PV module manufacturing plant, and the second the company’s intention to develop 5 GW worth of solar in India.
According to SunEdison, $190 million of the funds raised so far came through the secondary offering of SunEdison Semiconductor shares. The further $400 million raised so far comes by way of a credit commitment from several SunEdison relationship financial institutions for a 24-month loan (secured with a portion of SunEdison’s shares in its yield co, TerraForm Power).
However, analysts are less than impressed with SunEdison’s current status.
According to TheStreet Ratings team, SunEdison stock is a ‘SELL’: “driven by several weaknesses,” which they believe “should have a greater impact than any strengths”. They continue:
The company’s weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and poor profit margins.
Whether or not these comments come with the knowledge of SunEdison’s most recent announcements is unclear.
As reported last week, SunEdison is planning to build a solar PV manufacturing plant in conjunction with Adani Enterprises in the Indian state of Gujarat. The proposed plant is expected to require investment upwards of $4 billion, and upon completion will be the country’s largest such manufacturing plant.
On top of that, SunEdison announced plans to develop 5 GW of solar and wind energy across the southern Indian state of Karnataka. Apparently, SunEdison aims to install at least 1 to 1.5 GW worth of solar and wind over the next two years, and hopefully expand that out to 5 GW over the next five years.