The CEO of both of SunEdison’s subsidiaries,
TerraForm Power and TerraForm Global, is out.
SunEdison is the largest solar power firm in the world. Its two subsidiaries, known as yieldcos, were created to manage solar projects like utilities.
Brian Wuebbles became CEO of both yieldcos after a management shake-up in November and until earlier this month served as CFO of SunEdison as well.
He will now be replaced by a chair committee in the interim headed by the chairman of both subsidiaries, Peter Blackmore.
The shakeup is the latest episode in a dramatic nine months for the firm.
The stock has fallen almost 98% since July, when an attempt to acquire Vivint, another solar firm, revealed to investors that the company might not have as much cash as it needed.
On Monday, it was reported that the SEC is looking into whether or not the company lied to investors about its cash position. On Tuesday, SunEdison’s stock fell over 50% to near $0.50, after TerraForm Global warned that its parent might go bankrupt.
Then, on Wednesday, billionaire hedge fund manager David Tepper filed a lawsuit calling for Wubbles to step down (among a bunch of other things).
No, we ain’t gonna take it
Investors started asking questions about SunEdison’s cash position after it was revealed that the company was forcing its yieldcos to engage in take-or-pay agreements to finance its (now defunct) deal for Vivint. Basically those agreements meant that the yieldcos would have to buy deals from the parent, or pay a fee.
Naturally, this did not please investors in the yieldcos. David Tepper, the billionaire founder of hedge fund Appaloosa Management, was especially unhappy. He’s a TerraForm Power shareholder and started suing SunEdison over these agreements in December.
Vivint stepped away from the deal earlier this month, but still Tepper stayed the course. He told Business Insider that “we don’t start things just start things.” To Tepper, this is about governance.
See, in the November shake-up that made Wuebbles CEO of the yieldcos, SunEdison also appointed new members to its Conflicts Committee and to the boards of all its subsidiaries. Three days before the company announced these changes, two TerraForm Power board members quit, writing identical letters.
I am resigning from the Board of Directors of both the above referenced companies effective immediately.
The respective Conflicts Committees, as constituted before today, together with independent advisors, had been working hard and in good faith to protect the interests of the stockholders of the two companies.
As a result of today’s actions of each of the Boards, I don’t believe I will be able to do so going forward and therefore resign.
That is why, on Wednesday, Appaloosa filed an ammended complaint accusing SunEdison’s Conflicts Committee of being a “sham committee.” He wanted Wuebbles out, and now he’s got it.
But Tepper also called for the removal of Blackmore, who will now be running TerraForm Power along with two more people Tepper wants gone — Christopher Compton and Janis Jenkins-Stark.