SunEdison Reaches Legal Settlement on Latin American Power
March 04 2016 - 9:00AM
Dow Jones News
SunEdison Inc. said Friday that it had resolved a legal dispute
in connection with its failed acquisition of a Latin America
venture.
SunEdison, its holding company and its Terraform Power Inc.
affiliate, have been embroiled in a lawsuit filed by investors in
Latin America Power Holding B.V., a developer of alternative power
projects in Chile and Peru.
SunEdison had agreed to a $733 million deal for Latin America
Power assets last May but failed to wire the funds to go through
with the deal, court papers say.
After the deal fell through, Latin America shareholders
initiated arbitration and ultimately turned to New York courts,
afraid that SunEdison's mounting financial troubles created a risk
that it wouldn't be able to cover a potential loss in
arbitration.
In February, a New York judge issued a temporary restraining
order barring SunEdison from making any unusual moves with its
assets pending a showdown with Latin America Power investors.
SunEdison will pay $28.5 million to settle the lawsuit.
SunEdison, Terraform Power and its affiliates have not admitted
wrongdoing or liability.
SunEdison's shares, which are extremely volatile, have fallen
more than 90% in the past 12 months. SunEdison engaged in complex
financial engineering to develop its solar power plants, a strategy
that helped it grow, but led to problems when the affiliates it
spawned to draw in outside investors began to lose favor with the
markets and energy prices continued their sustained decline.
SunEdison has been selling assets and cutting jobs amid concerns
about a cash crunch. The company on Wednesday suspended payment of
quarterly dividends on its Series A perpetual convertible preferred
stock.
SunEdison is in the process of buying rooftop-solar company
Vivint Solar Inc. but its financial woes have jeopardized the
deal.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
March 04, 2016 08:45 ET (13:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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