The bankruptcy court for SunEdison on Sept. 26 issued a final written order that approves the sale of 136 MW of small solar projects in Minnesota to SoCore Energy LLC.
SoCore MN Acquisition LLC has been approved to acquire certain assets covered by a Purchase and Sale Agreement (PSA) between SUNE MN Development LLC (a subsidiary at SunEdison) 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.
Emil Giliotti Jr., a Vice President at Rothschild Inc., an advisor to SunEdison, 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’).”
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 include:
- 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); and
- Michael project, SunE Michael 1 LLC, 6 MW (dc).
Said the Sept. 26 order out of the U.S. Bankruptcy Court for the Southern District of New York: “The consideration provided by the Buyer under the PSA constitutes the highest or otherwise best offer for the Equity Interests and provides fair consideration and reasonably equivalent value to the Seller’s estate in exchange for the Equity Interests. The transactions contemplated by the PSA represent the best opportunity to maximize and realize the highest and best value of the Equity Interests for the Seller’s estate. Consummation of the Transactions at this time is in the best interests of the Seller, its creditors, its estate, its stakeholders, and other parties in interest.”
SoCore Energy said in a Sept. 26 announcement about this court approval that it has existing solar installations in Minnesota focused on the needs of commercial customers and is developing several other solar projects to serve those customers, as well as electric cooperatives in the state. These new projects acquired from SunEdison will form an integral part of SoCore’s expanding portfolio, with several projects commencing construction as early as the fourth quarter of 2016. SoCore is targeting completion of all project development and construction in 2017 using third-party tax equity and debt financing.
“We are excited to incorporate these high-quality projects into our development portfolio of assets in Minnesota,” said Robert Scheuermann, president of SoCore Energy. “These new solar projects will help to strengthen and accelerate our ability to supply clean, reliable and cost competitive renewable energy to our customers in the state.”
SoCore Energy is a market leader in commercial, industrial and distributed solar portfolio development. With hundreds of solar solutions designed and installed across 17 states, SoCore offers commercial and industrial companies, electric cooperatives and communities portfolio-wide solar solutions that provide energy cost savings and carbon reduction opportunities.