Updated: Major renewable energy developer SunEdison has launched a US$500 million convertible stock offering as well as a US$1 billion construction and operating asset warehouse investment vehicle that could be extended to US$2 billion.
Concerns have arisen over SunEdison’s aggressive growth projections and several major acquisitions that include First Wind and Vivint Solar and its ability to manage the huge financial commitments to its project pipeline that would roughly double completion plans over the next two years to over 4GW.
SunEdison remains loss making during its project expansion phase and had around US$1.3 billion in cash and cash equivalents at the end of the second quarter as well as around US$10 billion in debt.
Management had discussed plans in its most recent earnings call to arrange a new warehouse investment vehicle, having already established a US$1.5 billion ‘First Reserve Warehouse’ and the US$500M ‘Private Warehouse’ vehicle for its US-based projects dropped down to its TerraForm yieldco.
The US$500 million perpetual convertible preferred stock offering was said to have no maturity date. Goldman, Sachs & Co., BofA Merrill Lynch, Morgan Stanley, Deutsche Bank Securities, Macquarie Capital and J.P. Morgan are acting as joint book-running managers for the offering.
The new ‘WSIP Warehouse’ is a US$1 billion investment vehicle with US$300 million equity provided by WSIP, an infrastructure fund managed by Goldman Sachs.
SunEdison said that the debt would be led by Morgan Stanley, Bank of America and Deutsche Bank that included a further US$700 million provided in a US$500 million, five-year term loan and a US$200 million, four-year revolving credit facility.
SunEdison noted that it had the option to expand the WSIP Warehouse vehicle by a further US$1 billion in the future.
According to a research note from RBC Capital’s financial analyst, Mahesh Sanganeria SunEdison was expected to “continue to make similar funding announcements and improve its liquidity.”
In a follow-on SEC filing, the company estimated that the net proceeds from the perpetual convertible preferred stock offering will be approximately US$626.1 million. A total of 650,000 shares prices each at US$1,000 was being offered.