Bankrupt renewables firm SunEdison has informed its two yieldcos that it will no longer pay interest on their senior notes due to Chapter 11 bankruptcy proceedings, according to SEC filings.
SunEdison agreed in 2015 to pay interest on senior notes due 2022 for both TerraForm Global and TerraForm Power.
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The interest payments on behalf of TerraForm Power for the rest of 2016 were expected to be US$8 million alongside a further US$16 million in 2017 and any interest due on any late payments.
Meanwhile, payments on behalf of TerraForm Global for the rest of 2016 were expected to be US$37.1 million, and US$40 million in 2017 with further significant payments each year up to 2020.
In the SEC filings, both yieldcos said they contest the “purported termination” of the interest payments from SunEdison and said the termination letters sent by SunEdison were invalid.
However, the firms did say that, should SunEdison stop paying the interest, they expect to continue paying the interest on their senior notes using current liquidity and cash flow from operations.
Last month, it emerged that TerraForm Power added just 20MW of projects to its portfolio from SunEdison in Q1 2016.
SunEdison also confirmed that it will collaborate with both its yieldcos to hopefully sell and monetize its controlling Class ‘B’ shares in both units.