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SEC Filings

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


Item 1A. Risk Factors.
The following pages discuss the principal risks we face. These include, but are not limited to, risks related to the Brookfield Transaction and arising from the bankruptcy of our controlling shareholder, SunEdison. Any of these risk factors could have a significant or negative effect on our businesses, results of operations, financial condition or liquidity. They could also cause significant fluctuations and volatility in the trading price of our securities. Readers should not consider any descriptions of these factors to be a complete set of all potential risks and uncertainties that could affect us. These factors should be considered carefully together with the other information contained in this Annual Report on Form 10-K and the other reports and materials filed by us with the SEC. Furthermore, many of these risks are interrelated, and the occurrence of certain of them may in turn cause the emergence or exacerbate the effect of others. Such a combination could materially increase the severity of the impact of these risks on our businesses, results of operations, financial condition and liquidity.
Risks Related to the Brookfield Transaction
The Brookfield Transaction is subject to a number of conditions to closing, which may not be satisfied on a timely basis or at all.
On March 6, 2017, we entered into the Merger Agreement with affiliates of Brookfield pursuant to which a controlled subsidiary of Brookfield would acquire 100% of the outstanding equity interests in the Company. There can be no assurance that our entry into the Merger Agreement will result in the Brookfield Transaction being consummated, and speculation and uncertainty regarding the outcome of the Brookfield Transaction may adversely impact our business. Our Board has determined that the Merger Agreement is fair to, and in the best interests of, the Company and its stockholders and will submit the Merger Agreement to our stockholders for their consideration with the recommendation that our stockholders adopt and approve the Merger Agreement. The adoption and approval of the Merger Agreement requires (i) the affirmative vote of holders of a majority of the total voting power of the outstanding shares of our Class A common stock and Class B common stock entitled to vote thereon and (ii) the affirmative vote of holders of a majority of the outstanding shares of our Class A common stock entitled to vote thereon (excluding SunEdison, Brookfield and their respective affiliates or any person with whom any of them has formed a group). SunEdison holds a majority of the total voting power of our outstanding shares and has entered into a Voting and Support Agreement pursuant to which it has agreed to vote its shares of our Class A and Class B common stock in favor of the Merger Agreement, which was approved by the bankruptcy court overseeing the SunEdison Bankruptcy on June 7, 2017. However, there can be no assurance that the Merger Agreement will be approved by holders of a majority of the outstanding shares of our Class A common stock entitled to vote thereon (excluding SunEdison, Brookfield and their respective affiliates or any person with whom any of them has formed a group). As described more fully under Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, certain of our stockholders hold a significant number of shares of our Class A common stock and may possess the ability to significantly impact the outcome of the requisite “majority of the minority” approval.
Concurrently with the execution and delivery of the Merger Agreement, SunEdison and the Company, along with certain of their respective subsidiaries, executed and delivered a Settlement Agreement, which generally resolves claims, disputes and other issues arising from the historical sponsor relationship between the Company and SunEdison, and which was approved by the bankruptcy court overseeing the SunEdison Bankruptcy on June 7, 2017. The Merger Agreement may be terminated at any time if the Settlement Agreement is terminated in accordance with its terms.
Completion of the Brookfield Transaction under the Merger Agreement requires regulatory approvals from certain regulatory agencies, including energy regulatory agencies and antitrust authorities in South Africa, Brazil and Malaysia. In addition, completion of the Brookfield Transaction requires the settlement or termination of certain specified litigation involving the Company. While the Company has begun the process of notifying agencies and obtaining approvals and is continuing to take actions to obtain the required regulatory approvals prior to closing and to negotiate with the plaintiffs in the specified litigation, or, as appropriate, to confirm that approvals or settlement will not be required prior to closing, there is no assurance that we will be able to obtain the requisite regulatory approvals or settle or otherwise terminate the requisite litigation. Any condition, to the extent imposed, for obtaining any requisite regulatory approvals or the settlement or termination of the specified litigation could delay the completion of the Brookfield Transaction for a significant period of time or prevent it from occurring at all.
There is no assurance that the conditions to the completion of the Brookfield Transaction will be satisfied on a timely basis or at all. If the Brookfield Transaction is not consummated by December 6, 2017 (subject to a three-month extension under certain circumstances), the Merger Agreement may be terminated.



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