Print Page  |  Close Window

SEC Filings

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

our Board currently serve on the 10-person board of directors of TerraForm Power. In addition, some of our executive officers serve as executive officers of TerraForm Power, including Peter Blackmore, our and TerraForm Power’s Chairman and Interim Chief Executive Officer, and Rebecca Cranna, our and TerraForm Power’s Executive Vice President and Chief Financial Officer. Our directors and executive officers that overlap with those of TerraForm Power owe fiduciary duties to both companies.
Although conflicts between TerraForm Power and us were not expected to be significant when the companies were formed, as a result of various developments, including the Brookfield Transaction, the proposed merger and sponsorship transaction between TerraForm Power and affiliates of Brookfield and the SunEdison Bankruptcy, we have been and expect that we will continue to be presented with business decisions that will involve material interests of both companies. These decisions may relate to (i) business transactions in which both companies may have an interest, including the sharing of joint resources and service providers between the companies, (ii) the Brookfield Transaction, the proposed merger and sponsorship transaction between TerraForm Power and affiliates of Brookfield and any other decisions relating to the exploration of strategic alternatives that may involve both companies, (iii) the Settlement Agreement and any other decisions regarding the prosecution and settlement of the companies’ claims against SunEdison and other third parties, and (iv) other actions we may take or not take in connection with the SunEdison Bankruptcy. In such circumstances the allocations of expected costs and benefits between us and TerraForm Power will necessarily give rise to conflicts of interest. Due to the overlapping nature of the management and boards of directors of the Company and TerraForm Power, effectively managing these actual, perceived and potential conflicts will require substantial attention, and we can provide no assurance that we will identify all relevant actual, perceived or potential conflicts or adequately address such conflicts. Further, while we will endeavor to appropriately identify and manage such conflicts, the Company, as well as its directors and executive officers, will be subject to increased risk of conflict of interest claims.
In addition, certain of our directors and executive officers own stock, options or restricted stock units in both companies, and these ownership interests could create actual, perceived or potential conflicts of interest when our common directors and officers are faced with decisions that could have different implications for us and TerraForm Power.
Board and management changes could have a material adverse effect on our business.
During 2016, as a result of personnel decisions by SunEdison, the SunEdison Bankruptcy, our exploration of strategic alternatives and related developments, we have experienced a series of significant changes in the Board and our senior management. For additional information, see Item 1. Business - Recent Developments - Board of Directors and Management Changes.
As a result of these changes, we have experienced, and may continue to experience, disruption or difficulty in maintaining or developing our business. This could, in turn, impair our ability to execute our business strategy and adversely affect our business and results of operations.

Counterparties to our PPAs may not fulfill their obligations or may seek to terminate the PPAs early, which could result in a material adverse impact on our business, financial condition, results of operations and cash flows.

Substantially all of the electric power generated by our current portfolio of power plants is sold under long-term PPAs with public utilities or government, commercial, or industrial end users. Payments by our offtake counterparty may be delayed, or our offtake counterparty may be unable or unwilling to make complete and timely payments. For example, the offtake counterparty of one of our wind power plants in India is delayed by approximately one year on its payments to the applicable project company. This offtake counterparty is currently making payments on overdue amounts but it may be unable or unwilling to do so in the future. In addition, certain offtake counterparties provide a substantial portion of our consolidated revenues. See Item 1. Business - Customer Concentration. If a PPA was terminated or if, for any reason, any purchaser of power under a PPA is unable or unwilling to fulfill its related contractual obligations or refuses to accept delivery of power generated thereunder and, if we are unable to enter into a new PPA on acceptable terms in a timely fashion or at all, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. In the event of a delay in payment under any PPA, while we may be entitled to charge penalty interest for such delay, the delay in recovering the amounts due could nonetheless have a material adverse effect on the cash flows from, and cash available for distribution to shareholders generated by, the applicable power plants. The risk factors “The SunEdison Bankruptcy may adversely affect our relationships with current or potential counterparties” and “The SunEdison Bankruptcy has resulted in project defaults that may entitle the related lenders to demand repayment, enforce their security interests or other remedies or restrict the ability of the project companies to make distributions” above describe additional risks with respect to our counterparty relationships and PPAs due to the SunEdison Bankruptcy.


43