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SunEdison scraps deal to buy Morgan Stanley-controlled Continuum

24 November, 2015

California-headquartered SunEdison Inc, the world’s-largest renewable energy developer, has put a string of its power assets in India on the block and has scrapped the proposed deal to buy India assets of Singapore-based Continuum Wind Energy Ltd, separate media reports said.

Pashupathy Gopalan, president, SunEdison Asia Pacific, told Mint that the deal to buy Continuum has been called off and the firm will go slow on acquisitions while remaining bullish on the country.

The proposed acquisition of Continuum was announced in June this year. Although the value was not disclosed, given the operating and under-construction assets of the firm, this was estimated to be the biggest acquisition in the renewable energy space in the country to date.

It would have provided an exit to its majority owner Morgan Stanley Infrastructure Partners, a $4 billion global infrastructure investment fund under Morgan Stanley. The fund could have got a quick exit from its Indian portfolio firm even as infrastructure is said to be a 

long-gestation investment bet.

The fund had committed an investment of Rs 1,200 crore ($212 million) in the company in 2012 through compulsorily convertible preference shares for a 51 per cent stake.

Started in 2009, Continuum Wind Energy owns and operates 242 megawatts (MW) of wind power plants in Maharashtra and Gujarat and has 170 MW of wind power project under construction in Madhya Pradesh. The company has more than 1,000 MW of wind power plants in development across six states in India.

Continuum was founded by Arvind Bansal, an investment banker; Vikas Saraf, ex-Essar Group Director; Sukant Gupta, a former Wipro executive; Ashish Swarup, a former executive of Asian Pulp & Paper and former banker Gautam Chopra.

It started operations in India through its acquisition of Surajbari Wind Farm Development Pvt Ltd, operating in Kutch. Surajbari was acquired for Rs 72 crore from Vestas, a Denmark-based wind power company.

Separate emails sent to Continuum, SunEdison and Morgan Stanley Infrastructure Partners on the development did not elicit any response by the time of filing this article.

Prior to the deal with Continuum in India, it had inked an agreement to acquire 102 MW of operating wind power plants in Karnataka and Rajasthan from Spain-based Fersa Energías Renovables, SA for $33 million and also agreed to acquire the 51 per cent equity interest from its partner, an affiliate of Chint Solar (Zhejiang) Co Ltd, in the 23.1 MW solar project NSM 24 located in Rajasthan.

Early this month, SunEdison had bid aggressively for state-controlled utility NTPC’s 500 MW project at Andhra Pradesh. It had bid to provide power at as low as Rs 4.63 a kWhr.

Meanwhile, SunEdison is also reportedly looking to divest nearly 400 megawatts (MW) of solar power capacity in India that is expected to come on stream by early next year for about $350 million, to boost its balance sheet, media reports added. The Economic Times, that first reported the development citing unnamed sources, said it has hired Goldman Sachs to manage the stake sale.

SunEdison has grown at a breakneck speed with acquisitions across emerging markets but lately it has started showing signs of strain. Its arm Terraform Global Inc had a disappointing market float early this year and the firm had said last month it is cutting a good chunk of its workforce.

Its proposed deal to buy assets in Latin America also came unstuck.

On Monday, the firm announced a top level management shuffle. It said Emmanuel T Hernandez, SunEdison’s current chairman is being elevated as executive chairman, where he will work closely with Ahmad R Chatila, president and CEO, and the SunEdison management team as the company continues to implement plans to improve the effectiveness of its operating structure, drive operational efficiency and focus on its organic development opportunities.

The company also announced that Peter Blackmore has stepped down from the board and will join TerraForm Power, Inc and TerraForm Global, Inc as chairman of the board of both companies. Steven Tesoriere, who has separately resigned from the board of TerraForm Power and TerraForm Global, will remain on the SunEdison board.

SunEdison also announced that Brian Wuebbels, executive vice president and CFO, will assume the additional roles of CEO of TerraForm Power and TerraForm Global, effective immediately. He succeeds Carlos Domenech, who is quitting the group.


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SunEdison scraps deal to buy Morgan Stanley-controlled Continuum

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