Reuters - Hot Stocks

UPDATE 4-SunEdison shakes up top management at yieldcos; shares soar

* SunEdison CFO to head both yieldcos

* Could potentially see unification of three cos – analyst

* SunEdison shares jump as much as 19 pct (Adds investor comment, details)

By Sneha Banerjee and Shubhankar Chakravorty

Nov 23 SunEdison Inc said chief executives of its two “yieldcos” had stepped down and that its finance chief would take charge of the units, suggesting that the U.S. solar company could potentially unify all its units under one company.

The company’s shares rose as much as 19 percent in morning trading on Monday.

“You could potentially see unification of the three companies, that’d provide SunEdison more assets to sell to the third parties and increase its cash flow,” S&P Capital IQ analyst Angelo Zino said, adding that Monday’s shakeup is really step one of what one could see down the road.

SunEdison raised fresh liquidity concerns earlier this month after it posted a bigger-than-expected loss and said it would stop selling projects to its two “yieldcos” – dividend-paying units that hold solar, wind or other power assets for the parent company.

The yieldcos – TerraForm Power Inc and TerraForm Global Inc – had become an important source of funding for the solar industry bellwether.

But the yieldcos have taken a beating this year in part because low oil prices have reduced investor interest in all renewable energy stocks.

A surge in yieldco IPOs and secondary offerings in the last couple of years has also created “investor fatigue” within the industry.

Zino said it was “extremely expensive to have three publicly traded entities out there, especially if two of them really don’t have as much use as they did several months ago.

“The CFO becoming the significant management of the other two units makes that (unifying) easier and there’s no doubt that some have thought about that,” said Rob Thummel, portfolio manager at Tortoise Capital Advisors LLC.

TerraForm Power’s shares had fallen 70 percent this year through Friday close, while TerraForm Global stock had lost 65 percent since its IPO in July.

SunEdison said on Monday Chief Financial Officer Brian Wuebbels will assume additional roles of chief executive at the yieldcos.

The chief financial officer of the yieldcos had also stepped down and will be succeeded by Rebecca Cranna, the company said.

Cranna was most recently CFO at Global Asset Management for SunEdison.

The company also said TerraForm board members Perez Gundin, Mark Florian, Mark Lerdal and Steven Tesoriere had resigned.

SunEdison said it named Peter Blackmore, Jack Jenkins-Stark and Christopher Compton to its board. (Reporting by Sneha Banerjee and Shubhankar Chakravorty in Bengaluru; Editing by Sriraj Kalluvila)

Reuters: Hot Stocks

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