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SEC Filings

10-K
TERRAFORM GLOBAL, INC. filed this Form 10-K on 06/15/2017
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the notes contained herein. The results shown herein are not necessarily indicative of the results to be expected in any future periods. Unless otherwise indicated or otherwise required by the context, references to we, our, us, or the Company refer to TerraForm Global, Inc. and its consolidated subsidiaries.
Overview

We are a globally diversified renewable energy company that owns long-term contracted solar and wind power plants. Our business objective is to own and operate a portfolio of renewable energy power plants and to pay cash dividends to our stockholders. Our portfolio consists of solar and wind power plants located in Brazil, China, India, Malaysia, South Africa, Thailand and Uruguay with an aggregate net capacity (based on our share of economic ownership) of 919.0 MW as of May 31, 2017.

We have acquired a portfolio of long-term contracted clean power plants from SunEdison and unaffiliated third parties that have proven technologies, creditworthy counterparties, low operating risks and stable cash flows. We have focused on the solar and wind energy segments because we believe they are currently the fastest growing segments of the clean power generation industry globally. Solar and wind assets are also attractive because there is no associated fuel cost risk, the technologies have become highly reliable and assets have an expected life which can exceed 30 years. From time to time, we may selectively choose to acquire renewable energy projects before they have reached commercial operation if we believe there is greater value to the Company’s stockholders by owning the asset prior to commercial operation and if we believe that any risks to achieving commercial operation have been sufficiently mitigated.

On April 21, 2016, SunEdison and certain of its domestic and international subsidiaries voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code (the “SunEdison Bankruptcy”). As a result of the SunEdison Bankruptcy, current limitations on our ability to access the capital markets for our debt and equity securities, and other risks that we face, we adjusted our focus to executing on our near term plans and priorities. These near term business objectives include:

establishing stand-alone information technology, accounting and other critical systems and infrastructure;
directly hiring our employees;
focusing on the performance and efficiency of our existing portfolio of power plants;
mitigating, to the extent possible, the adverse impacts resulting from the SunEdison Bankruptcy, including ensuring the continuity of operation, maintenance and asset management of our power plants and engaging O&M and asset management services from third party providers to replace SunEdison and its affiliates where we do not perform these services ourselves;
working with our project level lenders and financing parties to cure, or obtain waivers or forbearance of, defaults that have arisen under certain of our project level debt financings as a result of the SunEdison Bankruptcy and delays in delivering project level audited financials; and
resolving the pending commitment to acquire three operating power plants from BioTherm.

As part of our overall strategic review process in connection with the SunEdison Bankruptcy, our Board initiated a process to explore and evaluate potential strategic alternatives to maximize stockholder value, including a merger or sale of our entire business.

As a result of this process, on March 6, 2017, the Company announced that it has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with affiliates of Brookfield Asset Management Inc. (“Brookfield”) pursuant to which a controlled subsidiary of Brookfield would acquire 100% of the outstanding equity interests in the Company (the “Brookfield Transaction”). If the Brookfield Transaction is consummated, each issued and outstanding share of our Class A common stock (with certain exceptions) will be converted into the right to receive the per share cash merger consideration, we will no longer have public stockholders and our Class A common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Except as otherwise noted, the disclosures in this Annual Report on Form 10-K for the fiscal year ended December 31, 2016 discuss our business and operations without considering the impact and consequences of the Brookfield Transaction and reflect the business strategy we expect to pursue in the event the Brookfield Transaction is not consummated.



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