The U.S. Bankruptcy Court approved SunEdison’s motion for an order authorizing and approving is entry into a transition services agreement with Terraform Power, regarding transition of a portion of the Terraform Power, regarding the transition of a portion of the Global Asset Management North American business unit (GAM Business).
As previously reported, “A significant portion of the GAM Business volume (approximately 60%) is attributable to services provided to affiliates of TerraForm Power (‘TERP’) and TerraForm Global (‘GLBL,’ and together with TERP, the ‘YieldCos’)….Because the services provided to the YieldCos comprised such a large portion of the GAM Business volume, the value of the GAM Business was limited by the YieldCos’ decision to terminate their relationship with the GAM Business. In light of this, ultimately, in February 2017, the one party still pursuing purchasing the GAM Business ceased negotiations….After considering its alternatives, the Debtors determined that immediate rejection of the Management Services Agreements and the TERP Contracts would have a detrimental effect on TERP – one of the Company’s most valuable assets – because TERP affiliated Service Recipients rely on the GAM Business for monitoring, reporting, and management and operation of their facilities, including compliance with certain regulatory requirements and the terms of certain credit facilities.”
In addition, “The Debtors and TERP have engaged in good faith negotiations to reach an agreement that preserves the value of TERP, preserves the jobs of up to 138 employees – 73 of which were previously transferred to TERP and 65 employees that have been identified as potential hires, and relieves the Debtors of the obligations and costs associated with providing GAM Business services to TERP.”
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