What: Shares of SunEdison (SUNEQ) jumped more than 10% early Wednesday after the company announced the closing of a new financing arrangement with Deutsche Bank to construct a 56-megawatt portfolio of four utility-scale solar projects in the United Kingdom.
So what: Though this notably marks SunEdison's first foray into what it describes as "the rapidly growing UK solar market," the company also announced that U.K.-based Foresight Solar Fund plans to acquire the entire portfolio of projects through a share purchase agreement once interconnected. Energy produced from the projects will be purchased from SunEdison by U.K.-based SmartestEnergy.
Now what: SunEdison President of EMEA and Latin America Jose Perez weighed in on the deal in a press release: "We are entering the UK solar market with a project portfolio while expanding our relationship with Deutsche Bank, this demonstrates our ability to utilize existing relationships to enter new markets and facilitate the expansion of our utility business without impacting our balance sheet."
That's a great thing since SunEdison isn't profitable on a trailing 12-month basis.
In the end, though, while the stock still looks admittedly expensive trading around 42 times next year's expected earnings, I think investors are right to celebrate today's announcement considering the U.K. has declared its intention to deploy more than 20 gigawatts of solar energy over the next six years. If SunEdison can grab a meaningful slice of that big pie, it should be able to handsomely reward patient shareholders down the road.