NEW YORK (TheStreet) -- SunEdison (SUNE) stock is tumbling by 9.85% to $2.47 in afternoon trading on Tuesday, after the renewable energy company bought and immediately sold a minority stake of solar assets from Dominion Resources (D).
SunEdison paid $117 million to acquire a 33% stake in the remaining 231 megawatt portion of Dominion's 567 megawatt portfolio of solar power plants.
In December, SunEdison announced a similar deal in which it purchased a 33% stake in a 336 megawatt portfolio of solar power plants from Dominion.
In both cases, the company then immediately sold the stake to Terra Nova Renewable Partners, a joint venture of SunEdison and JPMorgan. Terra Nova could purchase Dominion's 67% interest in the solar farms when "certain trigger events occur," according to a statement.
SunEdison has the option to repurchase these projects from the partnership during the next five years, and could thereby assign the call rights to the power plants to its TerraForm Power (TERP) yieldco.
To calm investors after accruing nearly $11.7 billion in debt last year to become the largest clean-energy developer, SunEdison has been selling projects in an effort to improve its balance sheet, Bloomberg reports.
Separately, TheStreet Ratings team rates SunEdison as a "sell" with a ratings score of D.
The company's weaknesses include its generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: SUNE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.