(Reuters) - A unit of hedge fund Appaloosa Management LP disclosed a 9.25 percent stake in TerraForm Power Inc (TERP.O), a yieldco of U.S. solar company SunEdison Inc SUNE.N.
TerraForm’s shares, which closed up 33 percent on Tuesday after the hedge fund questioned the company’s purchase of residential solar assets from SunEdison, were down about 3 percent at $8.89 in morning trading on Wednesday.
In a letter to TerraForm’s board, Appaloosa President David Tepper said the purchase represented a change in TerraForm’s business model and put shareholders at risk.
The hedge fund said in a filing on Wednesday that it started buying shares in the yieldco from Nov. 11, according to the filing.
TerraForm reported a bigger-than-expected loss on Nov. 10 and said it would stop selling projects to its two “yieldcos” - bundles of solar, wind or other power assets it spun off into dividend-paying public entities.
Appaloosa’s disclosure makes it the second-largest shareholder in the yieldco after hedge fund BlueMountain Capital Management LLC, according to Reuters data.
Reporting by Sneha Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty