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SEC Filings

TERRAFORM GLOBAL, INC. filed this Form 10-K on 12/21/2016
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We may also be unable to perform the services ourselves, through hiring employees and migrating or establishing separate systems. Implementing any changes in connection with such transition may take longer than we expect, cost more than we expect, and divert management’s attention from other aspects of our business. We may also incur substantial legal and compliance costs in many of the jurisdictions where we operate. In addition, as we have limited experience in developing our own capabilities and resources, there is no assurance that we would ultimately be successful in our efforts in each of these areas, if at all, which could result in delays or disruptions in our business and operations.
The SunEdison Bankruptcy has resulted in project defaults that may entitle the related lenders to demand repayment, enforce their security interests or restrict project companies to make distributions to us, as well as compelled us to seek an alternative asset manager, which we may not succeed in finding.
In all six of our debt-financed projects, SunEdison is a party to a material project agreement, or is a guarantor thereof, such as being a party or guarantor to an asset management or O&M contract. The project level financing agreements for our remaining two levered power plants in India contain provisions that provide lenders with the right to accelerate debt maturity due to SunEdison’s bankruptcy because SunEdison was an original sponsor of the project and/or party to certain material project agreements, such as O&M and EPC related contracts. In addition, for our three power plants in South Africa, the project level financing agreements contain events of default provisions triggered by the bankruptcy of SunEdison as a party to certain material project contracts, such as O&M and EPC related contracts.
Such defaults in our debt-financed projects, if not cured or waived, may entitle the related lenders to demand repayment or enforce their security interests, which could have a material adverse effect on our business, results of operations and financial condition. Such defaults may also restrict the ability of the project companies to make distributions to us. We are currently working with our project lenders to obtain waivers and/or forbearance agreements as we seek to cure such defaults; however, no assurances can be given that such waivers and/or forbearance agreements will be obtained.
Historically, SunEdison has provided O&M and asset management services to many of our power plants under project level O&M and asset management agreements between the applicable project companies and local SunEdison affiliates. None of these local SunEdison affiliates is a debtor in the SunEdison Bankruptcy, and therefore SunEdison cannot formally reject these agreements as part of the SunEdison Bankruptcy. However, SunEdison has failed to perform under many of these agreements and we are in the process transitioning away from SunEdison as an O&M and asset management service provider. Depending on the circumstances, we may manage the power plants ourselves or outsource our asset management and/or O&M functions in certain jurisdictions. We may not be able to adequately perform on the projects that we manage in-house, or identify a qualified third-party service provider that is willing to perform such services on equal or better terms than the existing contracts or at the same or lower prices for a given scope of services. If we are unable to adequately manage the projects or secure third-party service providers, it could lead to defaults under the terms of project     level debt contracts and other adverse consequences for our unlevered projects. An inability to successfully manage these projects or secure third-party service providers, and the resulting defaults and other consequences, or managing them at an excessively burdensome cost or securing third-party service providers on less favorable terms or at higher costs than our existing contracts, could have a material adverse effect on our business, results of operations and financial condition.
SunEdison was the construction contractor or module supplier for many of our projects, and it is unlikely that we will be able to recover on any claims under those contracts or related warranties.
SunEdison served as the prime construction contractor pursuant to engineering, procurement and construction contracts with our subsidiaries for most of our power plants acquired from SunEdison. These contracts are generally fixed price, turn-key construction contracts that include workmanship and other warranties with respect to the design and construction of the facilities that survive for a period of time after the completion of construction. These contracts or related contracts (including O&M agreements) also often include production or availability guarantees with respect to the output or availability of the facility that survive completion of construction. With respect to our power plants in Malaysia, we also utilized SunEdison solar modules and obtained solar module warranties from SunEdison, including module workmanship warranties and output guarantees. Because of these relationships, we have existing warranty or contract claims and will likely in the future have such claims. The SunEdison Bankruptcy will reduce or eliminate our recoveries on claims under these agreements and warranties, which may have a material adverse effect on our business, results of operation and financial condition.
SunEdison is a party to important agreements at the corporate and project levels, which have been adversely affected by the SunEdison Bankruptcy.
As detailed in other risk factors under “Risks Related to our Relationship with SunEdison and the SunEdison Bankruptcy,” we have a number of important agreements with SunEdison at the corporate and project levels. The SunEdison Bankruptcy has adversely affected our rights under these agreements in a number of respects. For example, the protection of the