UPDATE 1-Hedge fund Appaloosa seeks to inspect Terraform's books

Tue Dec 22, 2015 10:09am EST
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Dec 22 (Reuters) - TerraForm Power Inc shareholder Appaloosa Management LP said it wants to inspect the books of the solar yieldco to learn more about its dealings with parent SunEdison Inc.

Hedge fund Appaloosa, headed by David Tepper, said on Tuesday its request was related to SunEdison's deal to buy Vivint Solar Inc.

Funds affiliated with Appaloosa together own 7.6 million shares, or 9.5 percent of the outstanding Class A Common stock of TerraForm Power.

SunEdison agreed to buy rooftop panel installer Vivint Solar in July. As a part of the deal, TerraForm Power would eventually buy Vivint's residential solar rooftop portfolio.

SunEdison said on Dec. 9 that TerraForm would pay about $799 million for Vivint's portfolio, lower than the initial purchase price of $922 million.

Appaloosa had said on Dec. 1 that Terraform Power's proposed purchase of the assets represented a change in TerraForm's business model and put shareholders at risk.

The hedge fund said it is seeking records of any analysis conducted by the Terraform's board regarding valuation of Vivint's assets to be acquired by TerraForm.

Tepper had earlier said that there was a "distinct possibility" TerraForm Power would be forced to accept debt of "dubious credit quality" from SunEdison if the Vivint deal went through.

SunEdison shares were down about 24 percent at $5.12 in morning trading, while Terraform Power's shares were down about 6.8 percent at $11.60. (Reporting by Amrutha Gayathri in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)