Enters into Memorandum of Understanding with SunEdison
BETHESDA, Md., Jan. 23, 2017 (GLOBE NEWSWIRE) -- TerraForm Power, Inc. (Nasdaq:TERP) (“TerraForm Power” or the “Company”), an owner and operator of clean energy power plants, today announced that the Company has entered into an exclusivity agreement with Brookfield Asset Management (“Brookfield”) in connection with its previously disclosed strategic alternatives process to maximize shareholder value. Under the exclusivity agreement, the Company has agreed to negotiate exclusively with Brookfield in connection with a potential business combination between the Company and Brookfield until the earlier of the execution of a definitive agreement for such transaction or 11:59 p.m. New York City time on February 21, 2017.
There is no assurance that the Company and Brookfield will enter into a definitive agreement for a potential transaction and there is no assurance as to the form, terms or timing of any transaction even if an agreement is reached between the parties.
Settlement Discussions with SunEdison, Inc.
As previously disclosed, TerraForm Power has been engaged in settlement discussions with SunEdison, Inc. (“SunEdison”) as part of its ongoing strategic alternatives process, and announced today that it has entered into a memorandum of understanding (the “MOU”) with SunEdison. The MOU outlines potential separate settlements of claims between SunEdison and the Company and SunEdison and TerraForm Global, Inc. (Nasdaq:GLBL) (“TerraForm Global”) in connection with the Chapter 11 bankruptcy case of SunEdison (the “SunEdison Bankruptcy”). The Company’s Board of Directors approved the MOU upon the recommendation of its independent members who do not also serve on the Board of Directors of TerraForm Global. The settlements of the intercompany claims are subject to the approval of the U.S. bankruptcy court overseeing the SunEdison Chapter 11 cases.
The MOU contains certain non-binding proposed settlement terms to resolve the complex legal relationship between the Company and SunEdison, including, among other things, an allocation of the total consideration paid in connection with a transaction for all or part of TerraForm Power and, with certain exceptions, the full mutual release of all claims of SunEdison and its affiliated debtors and non-debtors. Under the proposed settlement terms, SunEdison would receive consideration equal to 36.9% of the total consideration paid to all of the Company’s shareholders, reflecting the settlement of intercompany claims, cancelation of incentive distribution rights and other factors considered by the Company’s Board of Directors. The remaining consideration would be distributed to holders of shares of the Class A common stock of the Company.
In addition, under the MOU, TerraForm Power and SunEdison will work toward the terms of an agreement for a sale of all or part of the Company, provided that the final settlement agreement is reached on or before January 27, 2017. Any transaction will be jointly approved by both TerraForm Power and SunEdison.
The proposed terms are not legally binding on any party to the MOU and are subject to a number of conditions and contingencies, including TerraForm Power entering into a transaction jointly approved by the Company and SunEdison, TerraForm Global entering into a transaction jointly approved by TerraForm Global and SunEdison and approval by the U.S. Bankruptcy Court by April 1, 2017 of the settlement agreements involving SunEdison and each of the Company and TerraForm Global.
Additional information about the agreements described herein can be found in the Current Report on Form 8-K that the Company filed with the Securities and Exchange Commission on January 23, 2017. A copy of the filing is available on the Investors page of TerraForm Power’s website at http://www.terraformpower.com.
TerraForm Power has engaged AlixPartners, Centerview Partners and Morgan Stanley as financial advisors and Sullivan & Cromwell LLP as its legal advisor.
About TerraForm Power
TerraForm Power is a renewable energy company that is changing how energy is generated, distributed and owned. TerraForm Power creates value for its investors by owning and operating clean energy power plants. For more information about TerraForm Power, please visit: www.terraformpower.com.
Cautionary Note Regarding Forward-Looking Statements
Except for historical information in this press release, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks, and uncertainties and typically include words or variations of words such as “expect,” “anticipate,” “believe,” “intend,” “plan,” “seek,” “estimate,” “predict,” “project,” “goal,” “guidance,” “outlook,” “objective,” “forecast,” “target,” “potential,” “continue,” “would,” “will,” “should,” “could,” or “may” or other comparable terms and phrases.
They include, without limitation, statements relating to TerraForm Power, TerraForm Global and SunEdison entering into settlement agreements; TerraForm Power, TerraForm Global and SunEdison documenting or entering into an agreement for a sale of all or part of the Company or TerraForm Global; the proposed terms and timing of any settlement agreement (including the proposed allocation of the total consideration paid in connection with a transaction for all or part of the Company or TerraForm Global and the mutual release of claims of SunEdison TerraForm Power and TerraForm Global); the contingencies relating to approval of any settlement of claims between TerraForm Power, TerraForm Global and SunEdison, including approval by the bankruptcy court in the SunEdison Bankruptcy; and the form, terms and timing of a transaction, if any, between the Company and Brookfield. These forward-looking statements are based on current expectations as of the date of this press release and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including but not limited to: whether and when TerraForm Power, TerraForm Global and SunEdison are able to reach definitive settlement agreements, the terms of any such settlement agreements, whether the bankruptcy court in the SunEdison Bankruptcy would approve the terms of any such settlement agreement, whether any interested party in the SunEdison Bankruptcy would contest the terms of any such settlement agreement, whether and when the Company and Brookfield are able to reach an agreement for a sale of the Company, the terms of any such agreement, whether any such agreement would be approved by the necessary parties ,as well as additional factors we have described in other filings with the Securities and Exchange Commission.
The risks included above are not exhaustive. Other factors that could adversely affect our business and prospects are described in the filings made by us with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Meaghan Repko / Joseph Sala / Nicholas Leasure
Joele Frank, Wilkinson Brimmer Katcher
TerraForm Power, Inc.