SunEdison, the solar energy company that has been the bane of investment portfolios across Wall Street since this summer, is surging on the news Tuesday that it will sell a bunch of projects in India for $231 million.
The buyer is Terra Form Global, a company created buy SunEdison specifically to execute its projects. That structure is called a yieldco.
SunEdison’s stock is up almost 10% on the news.
SunEdison’s stock started crashing over the summer on concerns that the company did not have enough cash to cover its debts and continue operations. Analysts wondered whether the yieldco structure was unsustainable.
On Monday Moody’s downgraded the credit ratings of SunEdison’s yieldcos, Terraform Power and Terraform Global, because of the “strained liquidity and financial position at parent Sun Edison Inc (SUNE, unrated) as well as additional capital raising requirements” at Terraform Power.
The stock is down 83% year to date.
SunEdison also announced on Tuesday that it had paid down a margin loan from Deutsche Bank, though there is still about $5 million outstanding in that loan.
“We believe a significant portion of the recent volatility around the Company and its subsidiaries has been attributed to the Margin Loan,” said Ahmad Chatila, SunEdison president and chief executive officer.
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