Ahead of a Sept. 22 court hearing on the matter, Robert Scheuermann, the President of SoCore Energy LLC, said in a declaration filed Sept. 19 at the bankruptcy court for SunEdison that the court should approve the free and clear sale to SoCore subsidiary SoCore MN Acquisition LLC of certain assets covered by a Purchase and Sale Agreement (PSA) between SUNE MN Development LLC ( the seller) and SoCore.
SoCore is an indirect, wholly-owned subsidiary of Edison International (NYSE: EIX). SoCore has agreed to acquire the equity interests in 22 projects of SunEdison’s commercial and industrial segment (C&I) currently under development in Minnesota for a purchase price of $79,804,159, subject to certain adjustments and conditions as set forth in the PSA.
The purchase price for the Minnesota projects includes reimbursement of $9,500,000 of deposits under the state of Minnesota’s Community Solar Garden Program and $12,332,300 in interconnection costs previously paid by SunEdison.
SunEdison commenced marketing the Minnesota projects for sale as early as December 2015, and entered into a letter of intent with SoCore in January 2016, at which time SoCore began conducting due diligence on the projects. After SunEdison and related companies filed for chapter 11 protection, they entered into another letter of intent on June 9 with SoCore, in which the debtors agreed to negotiate exclusively with SoCore for 45 days. Ultimately, negotiations produced the PSA.
Scheuermann wrote that the PSA was entered into “without any collusion, fraud or attempt to take unfair advantage of any party, including without limitation any other potential purchaser.”
Emil Giliotti Jr., a Vice President at Rothschild Inc., an advisor to SunEdison, also wrote in Sept. 19 testimony that this deal should be approved. He noted: “Through its large commercial and industrial segment (commonly referred to as ‘C&I’) – SunEdison has 22 C&I projects under development in the State of Minnesota (the ‘Minnesota Projects’). These projects include 15 self-developed projects and 7 additional projects that have been co-developed with Ecoplexus, Inc. (‘Ecoplexus’) under the terms of a prior agreement (the ‘Ecoplexus PSA’).”
Giliotti wrote that after SunEdison and affiliates filed the Initial Chapter 11 cases in May 2016, SunEdison restarted negotiations with this prospective buyer. Rothschild and/or SunEdison identified and contacted a list of potentially interested parties and solicited such parties’ interest in the equity onterests. Approximately 51 of these parties entered into nondisclosure agreements (NDAs) to further explore the potential purchase of the interests. But no other parties submitted qualified bids by a bid deadline.
Said SunEdison in its Aug. 10 motion for court approval of this sale: “The Minnesota Projects will provide 136 MW of power upon reaching their commercial operation dates and are located in a cold weather state with a project construction season dictated by the freeze and thaw cycles at project sites. Furthermore, under current Minnesota Public Utility Commission (‘MNPUC’) guidelines, which sets commercial operation date (‘COD’) deadlines from the time an application is ‘deemed complete,’ over 2/3 of the Minnesota Projects have hard COD deadlines expiring in May-June 2017.Although a recent unofficial decision by MNPUC may extend this timeline, there is no certainty that the current COD deadlines can be officially extended. The combination of the seasonal construction requirements and the second quarter 2017 completion deadline required Seller to move quickly to sell the Minnesota Projects by October 2016 to allow the Buyer to effectively plan, stage, and execute on the construction of the Minnesota Projects in total. This is necessary to preserve the full value and viability of the project portfolio.”
The 22 projects are
- Feely project, project company is SunE Feely 1 LLC, 7.5 MW (dc);
- Moore project, SunE Moore 1 LLC, 7.5 MW (dc);
- Winter project, SunE Winter 1 LLC, 7.5 MW (dc);
- Kjellberg project, SunE Kjellberg 1 LLC, 7.5 MW (dc);
- Lahr project, SunE Lahr 1 LLC, 7.5 MW (dc);
- Michael project, SunE Michael 1 LLC, 6 MW (dc);
- Ramler project, SunE Ramler 1 LLC, 7.5 MW (dc);
- Nesvold 2 project, SunE Nesvold 2 LLC, 7.5 MW (dc);
- Nesvold 1 project, SunE Nesvold 1 LLC, 7.5 MW (dc);
- Lundell project, SunE Lundell 1 LLC, 7.5 MW (dc);
- Gergen project, SunE Gergen 1 LLC, 6.5 MW (dc);
- Hellman project, SunE Hellman 1 LLC, 7.5 MW (dc);
- St. Cloud project, SunE St. Cloud 1 LLC, 4.5 MW (dc);
- Koppelman project, SunE Koppelman 1 LLC, 7.5 MW (dc);
- Rengstorf project, SunE Rengstorf 1 LLC, 7.5 MW (dc);
- Gopher project, Gopher CSG 1 LLC, 6 MW (dc);
- Taylors Falls project, Taylors Falls 1 CSG 1 LLC, 6 MW (dc);
- Hilltop Farm project, Hilltop Farm CSG 1 LLC, 7.5 MW (dc);
- Chisago 2 project, Wyoming 2 CSG 1 LLC, 7.5 MW (dc);
- Lindstrom project, Lindstrom CSG 1 LLC, 4.5 MW (dc);
- Richmond project, Richmond CSG 1 LLC, 5 MW (ac); and
- Randolph project, Randolph CSG 1 LLC, 5 MW (ac).