SunEdison looks to woo investors in India business after US bankruptcy

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Mumbai: SunEdison Inc. is in talks with several investors to attract investment in its India business and would not do a distress sale in the fastest growing renewable energy market, said the company’s Asia Pacific president Pashupathy Gopalan in a phone interview, hours after the US-based renewable energy firm filed for chapter 11 bankruptcy protection.

SunEdison, known to be the world’s largest renewable energy firm, on Thursday filed for chapter 11 bankruptcy protection in the US, after facing liquidity constraints and amassing close to $12 billion in debt from series of big ticket acquisitions.

A chapter 11 bankruptcy allows a firm to restructure its business and debt to remerge to normal operations.

SunEdison’s India business, which has built 700 megawatt (MW) of solar capacity till date and has about 1.7 gigawatt (GW) of yet-to-be-constructed projects, is unaffected by the chapter 11 filing in the US, Gopalan said over the phone from New York, where he spent several hours with the firm’s legal team discussing the course of action for the Indian business.

In addition to looking for equity partners at project-level, the company is in talks to bring in equity partners “at a full India business platform level”, Gopalan said. “We have provided information about specific projects to various interested parties and now they’re going to do their analysis followed by due diligence, so we will take probably about a month or so to select some partners to proceed to the next level after signing a definitive agreement.”

Gopalan said the company’s Indian assets are at good locations won at good tariffs with no “distress per se”. “In the last couple of weeks, as we have started to talk to people, there is tremendous amount of interest in SunEdision’s India projects… And we have 1.7 GW to build so it becomes an interesting readymade platform for somebody to come in and participate,” he said.

Struggling SunEdison has put all its India assets on the block, Mint reported on 4 April, citing people familiar with the matter. The clean energy company had in a November reverse auction, won a 500 MW solar project tender at record-low tariff of Rs.4.63 per kWh (kilowatt-hour), setting an example for other companies to bid aggressively.

In the past year, some Indian renewable energy firms have been able to do what SunEdison is now aiming by selling stake at their overall platform level. Aditya Birla Aditya Birla Nuvo Ltd was able to sell 49% stake in its subsidiary Aditya Birla Renewables Ltd to a unit of international private equity firm Abraaj Group. Another renewable energy firm, ReNew Power Ventures Pvt. Ltd, backed by Goldman Sachs, sold a significant minority stake to a unit of Abu Dhabi Investment Authority (ADIA) for $200 million.

India’s renewable energy sector has attracted strong interest from foreign funds after the government sharpened its focus on clean energy.

Prime Minister Narendra Modi is banking on renewable energy sources to fight climate change and has set an ambitious target of creating capacities to generate 175GW by 2022. The country currently has 22GW of wind energy capacity and over 5GW of solar capacity.

Recent months have seen other renewable energy companies either putting their assets on block or bringing in a financial investor for funding their pipeline of projects.