US-based renewable energy giant SunEdison has signed an agreement with its yieldco TerraForm Global to divest a series of its projects in India, totalling 425MW.
SunEdison Asia Pacific president Pashupathy Gopalan was quoted by Reuters as saying: "We’ll go through evaluation of good opportunities and wherever it makes sense we’ll continue to transact with the cash available in our yieldcos already."
The $231m transaction follows SunEdison’s announcement earlier this month that it will stop selling projects to its two yieldcos until market conditions turned favourable.
The projects, which are to be divested under the agreement, will replace a share of those projects and the associated cash available for distribution (CAFD), which were part of TerraForm Global’s initial portfolio, SunEdison said.
TerraForm Global chief executive officer Brian Wuebbels said: "This transaction provides higher yields replacing lower-yielding IPO projects that were intended to be acquired through M&A and is consistent with our strategy to focus on organic growth provided by our sponsor.
"We are pleased to be able to add these accretive assets with 20 year contracted cash flows to TerraForm Global’s portfolio and believe they are critical to achieving our 2016 dividend guidance."
Purchase price for the deal has been partially paid to SunEdison. The firm is heavily indebted at present and has utilised the share of the sale proceeds to pay off a portion of its margin loan.
Additionally, the firm also intends to lay off 5% to 10% of its employees in India, reports Business Standard.