U.S.-based residential solar system solution provider Vivint Solar announced to cancel its merger agreement with SunEdison due to SunEdison’s failure to meet certain obligations under the agreement pursuant. Vivint Solar intends to seek legal remedies available to it in respect of SunEdison’s willful breach, noted in Vivint Solar’s announcement.
The two parties announced their merger agreement initially in June 2015. The terms of agreement require TerraForm Power, the yield vehicle owned by SunEdison, to acquire 523MW of Vivint Solar’s operating assets and 1.6GW of PV installation pipelines with approximately US$2.2 billion. However, SunEdison can’t completely solve its financial problems emerged in mid-2015, resulting in a merger amendment in December 2015. Blackstone, a private equity firm and the major shareholder in Vivint Solar, committed providing a US$250 million credit facility to SunEdison to ensure the merger deal.
SunEdison acquired Vivint Solar for expanding solar operating assets for its yieldco vehicle and for entering rooftop PV market. Nonetheless, the rapid asset expansion and low ROI (return of investment) pulled TerraForm Power and SunEdison into financial troubles and stock slump. SunEdison has initialed several phases of business restructures, including hiring new managing members, laying off 15% of global employees, and introducing the “asset-light strategy.” Under the strategy, SunEdison sold its silicon wafer production facility in Kuchin, Malaysia to China’s LONGi by US$63 million, and closed its Posadena, Texas polysilicon production facility.
SunEdison is trying to get financing for pay the debts as well as establishes strategic partnerships with Chinese companies. Lerri Solar, a subsidiary of LONGi, has signed a six-year, 3GW mono-si PV module supply agreement with SunEdison, while SunEdison also signed seven-year, 20,000 tons polysilicon supply agreement with LONGi. Furthermore, SunEdison has launched a gigawatt-scale production line for N-type mono-si HIT cells/modules with China’s Jinneng Group in Shanxi, China.