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SEC Filings

10-K
TERRAFORM GLOBAL, INC. filed this Form 10-K on 06/15/2017
Entire Document
 

Our entry into the Merger Agreement, and our exploration of strategic alternatives generally, involve certain risks and uncertainties, which may, among other things, disrupt our business or adversely impact our revenue, operating results and financial condition. A change of control of the Company without the consent of the lenders under our corporate level revolving credit facility (the "Revolver") would constitute an event of default under our Revolver and, pursuant to the indenture governing the Senior Notes, a change of control of the Company would require TerraForm Global Operating, LLC, a wholly-owned subsidiary of Global LLC (“Global Operating LLC”), to offer to repurchase its outstanding Senior Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date. Additionally, the occurrence of such changes may trigger change of control provisions in certain of our PPAs. There can be no assurance that we will be able to complete the Merger, and failure to complete the Merger may adversely impact our business. See “Risks Related to the Brookfield Transaction,” “Risks Related to a Failure to Complete the Brookfield Transaction,” “Risks Related to our Relationship with SunEdison and the SunEdison Bankruptcy” and “Risks Related to our Business” in Item 1A. Risk Factors for additional information.
The foregoing description of the Merger Agreement and the Voting and Support Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement and the Voting and Support Agreement, copies of which were included as Exhibit 2.1 and Exhibit 2.3, respectively, to our Current Report on Form 8-K filed with the SEC on March 7, 2017 and which are incorporated herein by reference. The foregoing description of the Renova Settlement Agreement and the Renova Letter Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Renova Settlement Agreement and the Renova Letter Agreement, copies of which were included as Exhibit 10.1 and Exhibit 10.2, respectively, to our Current Report on Form 8-K filed with the SEC on May 30, 2017 and which are incorporated herein by reference.
SunEdison Bankruptcy and Settlement Agreement with SunEdison
As discussed in “Business,” “Risk Factors” and this and other sections of this Annual Report on Form 10-K, including our audited consolidated financial statements and the notes thereto contained in this Annual Report on Form 10-K, the SunEdison Bankruptcy may have a material adverse effect on the Company. No assurance can be given on the outcome of the SunEdison Bankruptcy or its impact on the Company. Our Conflicts Committee is responsible for oversight and approval of the business and affairs of the Company relating to or involving SunEdison and any of its affiliates (other than the Company), including in connection with the SunEdison Bankruptcy. The matters described in this section entitled “SunEdison Bankruptcy and Settlement Agreement with SunEdison” and other matters that presented conflict of interest issues between the Company and SunEdison have been approved and authorized pursuant to this authority by those members of the Conflicts Committee in place at the time the applicable decision was made.
The Company is not a part of the SunEdison Bankruptcy and does not rely substantially on SunEdison for funding, liquidity, or operational or staffing support. The Company continues to participate actively in the SunEdison Bankruptcy proceedings, and the SunEdison Bankruptcy will continue to have a negative impact on the Company given our complex relationship with SunEdison.
During the SunEdison Bankruptcy, SunEdison has not performed substantially as obligated under its agreements with us, including under sponsorship arrangements consisting of the various corporate level agreements put in place at the time of the Company’s IPO (collectively, the “Sponsorship Arrangement”) and certain O&M and asset management arrangements. SunEdison’s failure to perform substantially as obligated under its agreements with us, including under the Sponsorship Arrangement, project level O&M and asset management agreements and other support agreements may have a material adverse effect on the Company. Despite these adverse effects, the Company operates its business without significant support from SunEdison pursuant to plans for transitioning away from reliance on SunEdison that we are in the process of implementing. These plans include, among other things, establishing stand-alone information technology, accounting and other critical systems and infrastructure, directly hiring our employees, and retaining third parties to provide O&M and asset management services for our power plants where we do not perform these services ourselves. In addition to the one-time costs of implementing a stand-alone organization, our business will be adversely affected to the extent we are unsuccessful in implementing the relevant plans or the resulting ongoing long-term costs are higher than the costs we expected to incur with SunEdison as a sponsor.
The project level financing agreements for our two remaining levered power plants in India and our three power plants in South Africa contain provisions that provide the lenders with the right to accelerate debt maturity due to the SunEdison Bankruptcy because SunEdison is an original sponsor of the project and/or a party to certain material project agreements, such as O&M and EPC related contracts. In addition, certain audited financial statements at the project level were delayed and may be delayed again in the future. Future delays would create defaults at the project level for our levered power plants. If not cured or waived, these defaults may restrict the ability of the project companies to make distributions to us and may provide the lenders with the right to accelerate debt maturity. However, neither our Revolver nor the indenture governing the Senior Notes includes an event of default provision triggered by the SunEdison Bankruptcy, and none of our power purchase agreements


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