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SEC Filings

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

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.
Our failure to obtain such waivers or forbearance agreements with respect to defaults or to comply with those and other covenants has resulted in (or could result in future) events of default which, if not cured or waived, may entitle the related lenders to demand repayment or enforce their security interests or other remedies, which could have a material adverse effect on our business, results of operations and financial condition. If we are unable to make distributions from our project companies, it would likely have a material adverse effect on our ability to pay dividends to holders of our Class A common stock.
If our subsidiaries default on their obligations under their non-recourse indebtedness or voluntarily or involuntarily commence bankruptcy proceedings, we may be required to make payments to lenders to avoid such default or to prevent foreclosure on the collateral securing the non-recourse debt. If we are unable to or decide not to make such payments, we would lose certain of our power plants upon foreclosure.
Our subsidiaries incur, and we expect will in the future incur, various types of non-recourse indebtedness. Non-recourse debt is repayable solely from the applicable power plant’s revenues and is secured by the power plant’s physical assets, major contracts, cash accounts and, in many cases, our ownership interest in the project company. Limited recourse debt is debt where we have provided a limited guarantee, and recourse debt is debt where we have provided a full guarantee, which means if our subsidiaries default on these obligations, we will be liable directly to those lenders, although in the case of limited recourse debt only to the extent of our limited recourse obligations. Currently, all of our project level indebtedness is non-recourse, however we may decide to make payments to prevent the lenders to these subsidiaries from foreclosing on the relevant collateral. Such a foreclosure could result in us losing our ownership interest in the subsidiary or in some or all of its assets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. To prevent a foreclosure, we may be required to use amounts distributed by our other subsidiaries as well as other sources of available cash, reducing our cash available to execute our business plan and pay dividends to holders of our Class A common stock.
Our ability to raise additional capital to fund our operations may be limited.
Our primary business is to own and operate renewable energy power plants. We do not always expect to have sufficient amounts of cash on hand to operate our assets. As a result, we may need to arrange additional financing to fund a portion of our potential contingent liabilities and other aspects of our operations. Our ability to arrange additional financing, either at the corporate level or at a project level, is, and may continue to be, limited.
Our ability to pursue additional financing is currently limited by the terms of the Merger Agreement. In the event that the Brookfield Transaction is terminated and we choose to pursue additional financing, our ability to raise such additional financing, as well as the costs of such financing, will be dependent on numerous factors, including:
general economic and capital market conditions;
credit availability from banks and other financial institutions;
investor confidence in us, our partners and SunEdison, as our controlling stockholder;
the impact of the SunEdison Bankruptcy;
the impact of the failure to complete the Brookfield Transaction;
uncertainty regarding the Company's future in the event that the Brookfield Transaction is terminated and the consequences of such uncertainty, including on our ability to secure financing on attractive terms or at all;
our financial performance and the financial performance of our subsidiaries;
our level of indebtedness and compliance with covenants in debt agreements;
when we file our periodic reports with the SEC and complete project level financial statements;
maintenance of acceptable credit ratings or credit quality, including maintenance of the legal and tax structure of the project company upon which the credit ratings may depend;
our cash flows; and
provisions of tax and securities laws that may impact raising capital.
We may not be successful in obtaining additional financing for these or other reasons. Furthermore, we may be unable to refinance or replace non-recourse financing arrangements or other credit facilities on favorable terms or at all upon the expiration or termination thereof. Our failure, or the failure of any of our power plants, to obtain additional capital or enter into new or replacement financing arrangements when due may constitute a default under such existing indebtedness and may have a material adverse effect on our business, financial condition, results of operations and cash flows.


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