Energy Business

TerraForm Global Files for IPO

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TerraForm Global Inc. filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). No terms were given in the filing, but the proposed maximum value of the offering is $700 million. Currently the company has not elected which exchange to list its stock on.

The underwriters for the offering are J.P. Morgan, Barclays, Citigroup and Morgan Stanley.

TerraForm Global is a globally diversified, dividend growth-oriented company formed to own and operate contracted clean power generation assets in attractive, high-growth emerging markets. The business objective is to acquire clean energy generation assets from SunEdison Inc. (NYSE: SUNE) and unaffiliated third parties.

The assets the TerraForm Global plans to acquire are expected to produce high-quality, long-term contracted cash flows, primarily by serving utility and commercial customers with strong credit profiles.

The initial target markets will be China, Brazil, India, South Africa, Peru, Uruguay, Malaysia and Thailand. According to the company, most of these countries are expected to be among the fastest growing solar and wind energy markets worldwide from 2015 to 2020 in terms of annual installations and capital investment in renewable energy projects.

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According to the filing:

Our initial portfolio consists of solar projects located in China, India, South Africa, Uruguay, Malaysia and Thailand, wind projects located in China, Brazil, India and South Africa, and hydro-electric projects located in Brazil and Peru. These projects have a total combined capacity of 987.8 MW, and we forecast that they will generate an aggregate of $164.8 million of cash available for distribution for the year ending December 31, 2016. All of these projects are supported by power purchase agreements, or “PPAs,” with creditworthy counterparties. The PPAs for projects included in our initial portfolio have a weighted average remaining life of 19 years as of December 31, 2014.

The company intends to rapidly expand and diversify its initial project portfolio by acquiring utility-scale solar and commercial and industrial distributed solar, wind and hydroelectric power generation assets located in the initial target markets. TerraForm Global expects to pursue opportunities in other high-growth emerging markets that have characteristics similar to those of the initial target markets, with a focus on markets located in Asia, Africa, Latin America and the Middle East.

Previously, SunEdison spun off its other yieldco, TerraForm Power Inc. (NASDAQ: TERP), a publicly traded yieldco created last year that currently holds nearly 800 megawatts of solar generation and recently added 521 megawatts of contracted wind and solar in its acquisition of First Wind Holdings. This yieldco services U.S. assets while TerraForm Global will service international assets.

Thursday afternoon, shares of SunEdison were trading up about 12% at $27.89, after the company reported earnings earlier in the morning. The stock has a consensus analyst price target of $31.62 and a 52-week trading range of $13.09 to $27.99.

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