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SEC Filings

TERRAFORM GLOBAL, INC. filed this Form 10-K on 06/15/2017
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divert management’s attention from our existing business concerns, disrupt our ongoing business or not be successfully integrated. As a result, the consummation of acquisitions may have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may not be able to effectively identify or consummate future acquisitions on favorable terms, or at all. Additionally, even if we consummate acquisitions on terms that we believe are favorable, such acquisitions may in fact result in a decrease in cash available for distribution to holders of our Class A common stock. In addition, we may engage in asset dispositions or other transactions that result in a decrease in our cash available for distribution.
Future acquisition opportunities for power plants are limited. SunEdison failed to complete construction and transfer to us the Uruguay Projects, the Bora Bora Poly wind power project and the 425 MW India Projects. As a result of these failures, which stem in part from the SunEdison Bankruptcy, as well as SunEdison’s failure to develop the Call Right Projects or any of the other projects in its development pipeline, we will not receive any additional power plants from SunEdison under the Project Investment Agreement, India PSA or Support Agreement. The Settlement Agreement provides for the termination of these agreements and would result in the release of our intercompany claims against SunEdison in connection with such agreements. Going forward, we will compete with other companies for future acquisition opportunities from third parties. This may increase our cost of making acquisitions or cause us to refrain from making acquisitions at all. Some of our competitors are much larger than us with substantially greater resources. These companies may be able to pay more for acquisitions and may be able to identify, evaluate, bid for and purchase a greater number of assets than our resources permit.
If we are unable to identify and consummate future acquisitions, it will limit our ability to pay dividends to holders of our Class A common stock. In addition, as we continue to manage our liquidity profile, we may engage in asset dispositions, or incur additional project level debt, which may result in a decrease in our cash available for distribution.
The substantial decline of our stock price has significantly increased the difficulty of identifying acquisitions that we believe will be accretive to cash available for distribution per unit. Even if we consummate acquisitions that we believe will be accretive to cash available for distribution per unit, those acquisitions may in fact result in a decrease in cash available for distribution per unit as a result of incorrect assumptions in our evaluation of such acquisitions, unforeseen consequences or other external events beyond our control. Furthermore, if we consummate any future acquisitions, our capitalization and results of operations may change significantly, and stockholders will generally not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of these funds and other resources. As a result of the negative impact on our business from these developments, we no longer expect to achieve the growth rate in our dividend per Class A common share that we had been targeting. If our stock price continues to trade at current levels, we may not be able to consummate transactions that are accretive to cash available for distribution per unit or increase our dividend per share of Class A common stock.
Laws, governmental regulations and policies supporting renewable energy, and specifically solar, wind (including tax incentives and feed-in tariffs), could change at any time, including as a result of new political leadership, and such changes may have a material adverse effect on our business.
Renewable energy power plants currently benefit from various national, provincial, state and local governmental incentives. Certain of the power plants in our portfolio rely on capital subsidies from government authorities in jurisdictions where such facilities are located. Governmental regulations and policies could be changed to provide for new rate programs that undermine the economic returns for both new and existing renewable energy power plants by charging additional, non-negotiable fixed or demand charges or other fees or reductions in the number of renewable energy power plants allowed under net metering policies. In addition, unanticipated events beyond our control, such as a change in law may require us to make improvements or other modifications to one or more of our facilities, which could have an adverse effect on our operating results. Our business could also be subject to new and burdensome interconnection processes, delays and upgrade costs or local permit and site restrictions.
In addition, we face risks related to potential changes in tax or other laws that may limit the benefits of solar, wind energy investment. For example, our solar power plants in Thailand currently benefit from a “tax holiday” granted by Thailand’s Board of Investment. This incentive includes an eight-year tax holiday, customs duty exemptions and a number of other non-tax incentives. In the event that we fail to comply with the conditions of the Board of Investment certificate, there is a risk that the privileges granted therein may be revoked wholly or partially, which could result in, among other things, an increase in the rate of income tax applicable to our solar power plants in Thailand. In Brazil, certain tax benefits associated with inputs and equipment are available to construct renewable energy power plants. Most of these tax benefits have expiration dates that may or may not be extended. Also, discounts on grid tariffs available to renewable power generation projects may be revoked in the future. Without these benefits, the cost of constructing and operating renewable energy power plants would