Green Energy Chronicles
John's latest update on graft, corruption and waste in the energy sector.
Solar-energy company SunEdison Inc. plans to file for bankruptcy protection in coming weeks, a dramatic about-face for a company whose market value stood at nearly $10 billion in July.
Separately Monday, Reuters reported that more than two dozen lawsuits have been filed against SunEdison and its executives since the beginning of the year, primarily from shareholders claiming to have been misled about the company's financial position. The lawsuits also include large and small plaintiffs seeking payment, including Massachusetts-based Valley Home Improvement, alleging it's owed $37,000 for solar panel installation, and Silicon Valley's Khosla Ventures and partners claim SunEdison owes them $6 million related to a $27.5 million acquisition of EchoFirst Inc., according to the news agency.
Under the First Wind deal, SunEdison and TerraForm Power bought 500 megawatts of operating wind farms, 21 megawatts of operating solar farms and 1.6 gigawatts of development-stage projects. They deferred about $510 million in earn-out project payments, and about $231 million of that amount remains unpaid. That’s the amount D.E. Shaw and Madison Dearborn Capital are seeking from TerraForm Power, which also was one of the buyers and shares responsibility for the debt, according to the suit.
The case involving the First Wind deal is D.E. Shaw Composite Holdings LLC v. TerraForm Power LLC, 651752/2016, New York State Supreme Court, New York County. The other case is TerraForm Global Inc. v. SunEdison Inc., No. 12159, Delaware Chancery Court (Wilmington).
The company burned no fossil fuels but plenty of taxpayer dollars. Even $1.5 billion in subsidies and loan guarantees can’t save a “clean” energy company from bankruptcy. That’s the takeaway from the looming failure of SunEdison, a company that touts itself as the “largest global renewable energy development company.” Once a darling of Wall Street and the green Left because of SunEdison’s portfolio of wind and solar projects, the company’s stock is now in free fall. Furthermore, two related companies that were spun off from SunEdison — TerraForm Global and TerraForm Power — also appear to be in financial distress. On March 30, Brian Wuebbels, the CEO of both TerraForm companies, resigned effective immediately. If all that weren’t enough, the company is also under investigation by both the Justice Department and the Securities and Exchange Commission about its finances and the disclosures it made to investors.
SunEdison Death Spiral
When SunEdison went through difficult layoffs in October 2015, hundreds were let go -- but the folks in the C-suite were mostly left unscathed. As GTM's Stephen Lacey reported, "The cuts have reached all the way to the VP level, but not the executive level. Sources within the company expressed worry and surprise that the cuts didn't impact the architects of the Vivint acquisition."
The other shoe has started to drop.
- According to Julien Dumoulin-Smith at UBS, Steve Tesoriere, "an activist investor [who] played a key role in developing SunEdison’s YieldCo strategy," has resigned from the solar and wind developer's board. Tesoriere's Altai Capital Management owns approximately 2.3 percent of SunEdison, according to a proxy filing. UBS notes, "Tesoriere was also one of four to resign as a board member of SunEdison YieldCo TerraForm Power in November 2015."
- SunEdison COO Francisco “Pancho” Perez Gundin left the company last week.
- According to UBS, Paul Gaynor (former First Wind CEO) has also departed, although this was not disclosed in the 8K filing. "Given Paul's former role as CEO of First Wind, we continue to perceive growing risk to execution on guided targets, particularly on wind backlog," reported UBS.
Northern States Metals, a maker of extruded aluminum products and owner of Solar FlexRack, a ground-mount solar racking system supplier, named Jeff Gwinnell as CEO. Gwinnell was most recently CEO of Avtron, a manufacturer of engineered equipment and components. Gwinnell replaces Tom Meola, who resigned from the company after four years as CEO. Solar FlexRack has completed more than 1 gigawatt worth of solar racking installations.
CLEAResult, a 3,000-employee firm that designs and implements energy-efficiency programs for utilities, named Aziz Virani as its new CEO. Virani joins the company from Avanade, a technology consultancy. Prior to Avanade, Virani was a partner at Accenture. Co-founder and interim CEO Jim Stimmel will return to the executive VP position and remain on the board. CLEAResult is part of equity firm General Atlantic's portfolio. Robert Scheuermann, SoCore Energy’s interim president and CFO, was officially named full-time president of the C&I solar developer. SoCore Energy is a subsidiary of Edison International
Chris Beitel is now COO of battery-based energy storage firm SimpliPhi Power. Previously, Beitel was executive VP of global operations and planning at Silevo, playing a role in its $350 million acquisition by SolarCity. The company's battery technology uses a lithium-ferrous-phosphate chemistry.
Tom Werthan was named CFO at Phononic, a solid-state cooling and heating technology startup. Previously, Werthan was CFO at Solid State Equipment, a semiconductor capital equipment firm sold to Veeco in 2014. The near-term applications for Phononic's thermoelectrics include high-end refrigeration for labs and medical facilities, as well as cooling for fiber optics and data servers. Phononic has raised more than $85 million in funding from investors including Eastwood Capital, Wellcome Trust, Tsing Capital, Venrock, Oak Investment Partners, and Rex Health Ventures.
Jacqueline DeRosa was promoted to VP of emerging technologies at Customized Energy Solutions, a consultancy and energy market specialist. CES recently acquired the assets of demand-response startup Powerit.
Sighten, a solar software provider, added Vivek Malipatil, previously with Verengo Solar, as VP of strategy and operations, and Mariya Nomanbhoy, previously with CPF, as VP of product. Sighten landed a $3.5 million round A of venture funding from Obvious Ventureslate last year for its platform to drive down solar's soft costs.
Clinton’s Cover-Up Team
Ray Maxwell, a former assistant secretary of state for North Africa, has told reporters that Mills was one of several Clinton aides who on a Sunday afternoon “separated” out Benghazi-related documents that might put Clinton or her team in a “bad light.” These documents were kept out of the pile that the State Department turned over to the Accountability Review Board that was investigating Benghazi. When Maxwell stumbled upon the operation, which was taking place in a “basement operations-type center at State Department headquarters in Washington,” he questioned whether it was above-board. “Isn’t that unethical?” he asking the office director in charge of the weeding-out process. “Ray, those are our orders,” she answered. A few minutes later, Mills entered the room and challenged Maxwell over his presence, asking him, “Who are you?”
My question to Ray Maxwell is this. Have you or Hillary facilitated any business for UPC Renewables North Africa? UPC Renewables was after all, a parent company of First Wind.
SUNE Bond Coupon Date 4/1/2016: $255,700,000 SUNE Bond Coupon Date 4/15/2016: $316,100,000
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