SunEdison could raise $300 million in US solar unit IPO: CFO

Mon Nov 25, 2013 12:47pm EST

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(Reuters) - SunEdison Inc (SUNE.N) could raise up to $300 million to fund new projects by spinning off some solar power plants into a new publicly listed company in the United States next year, the company's chief financial officer told Reuters.

The company plans to float 20 percent to 30 percent of a subsidiary called SunEdison Yield Co, Brian Wuebbels said in an interview on Monday.

Based on cash flow, the unit could be valued at between $800 million and $1 billion, he said.

Wuebbels said the unit, which will include projects in the United States, Canada, Mexico, Chile, UK and Japan, will likely have $40 million to $60 million of distributable cash flow.

SunEdison, which is focused on the high-margin business of developing solar farms, is looking to lower the cost of financing new solar power plants.

Solar companies are experimenting with new structures to cut capital costs. Canadian Solar Inc (CSIQ.O) has also said that it is considering spinning off a unit that will hold some of its solar power plants.

SunEdison Yield Co will likely pay a quarterly dividend, with the first payout expected in the first quarter after the initial public offering, Wuebbels said.

"We will get 70-80 percent of dividends every quarter from that vehicle and what that will create for the parent company is a very stable cash and profit stream into the future at a very low cost of capital," Wuebbels said.

St. Peters, Missouri-based SunEdison, which has a market capitalization of about $3.3 billion, is also looking at launching a similar unit in Asia.

The subsidiary, housing the company's projects in Asia and South Africa, could be listed in Singapore or Hong Kong, Wuebbels said.

SunEdison is planning the U.S. IPO by the second quarter of next year, with the overseas listing following in a few months, he said.

SunEdison shares were down 4 percent at $12.23 in afternoon trade on Monday. The stock has risen four-fold this year, in keeping with a broader rally in the solar industry.

(Editing by Saumyadeb Chakrabarty)

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