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SEC Filings

TERRAFORM GLOBAL, INC. filed this Form 10-Q on 06/27/2017
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may differ from what may be viewed as material by investors and (d) have been included in the Merger Agreement for the purpose of allocating risk among the contracting parties rather than establishing matters as facts. Accordingly, the representations, warranties and covenants in the Merger Agreement have been disclosed only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding the Company or its business. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may have changed after the date of the Merger Agreement and may continue to change in the future, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
The Company's entry into the Merger Agreement, and its exploration of strategic alternatives generally, involve certain risks and uncertainties, which may, among other things, disrupt its business or adversely impact its revenue, operating results and financial condition. A change of control of the Company without the consent of the lenders under the Company’s corporate level revolving credit facility (the “Revolver”) would constitute an event of default under the Revolver and, pursuant to the indenture governing the Company's 9.75% Senior Notes due 2022 (the “Senior Notes”), would require TerraForm Global Operating, LLC, a wholly-owned subsidiary of Global LLC (“Global Operating LLC”), to offer to repurchase its outstanding Senior Notes at 101.0% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date. Additionally, the occurrence of such changes may trigger change of control provisions in certain of the Company’s Power Purchase Agreements (“PPAs”). There can be no assurance that the Company will be able to complete the Merger, and failure to complete the Merger may adversely impact its business.
The foregoing description of the Merger Agreement, the Voting and Support Agreement, the Renova Settlement Agreement and the Renova Letter Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, the Voting and Support Agreement, the Renova Settlement Agreement and the Renova Letter Agreement.
SunEdison Bankruptcy and Settlement Agreement with SunEdison
The Company's controlling shareholder, SunEdison, Inc., and certain of its affiliates voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 21, 2016 (the “SunEdison Bankruptcy”). As discussed elsewhere in the Company’s unaudited condensed consolidated financial statements and the notes thereto contained in this Quarterly Report on Form 10-Q, the SunEdison Bankruptcy may have a material adverse effect on the Company. No assurance can be given on the outcome of the SunEdison Bankruptcy or its impact on the Company. The Company’s Conflicts Committee is responsible for oversight and approval of the business and affairs of the Company relating to or involving SunEdison and any of its affiliates (other than the Company), including in connection with the SunEdison Bankruptcy. The matters described in this section entitled “SunEdison Bankruptcy and Settlement Agreement with SunEdison” and other matters that presented conflict of interest issues between the Company and SunEdison have been approved and authorized pursuant to this authority by those members of the Conflicts Committee in place at the time the applicable decision was made.
The Company is not a part of the SunEdison Bankruptcy and does not rely substantially on SunEdison for funding, liquidity, or operational or staffing support. The Company continues to participate actively in the SunEdison Bankruptcy proceedings, and the SunEdison Bankruptcy will continue to have a negative impact on the Company given its complex relationship with SunEdison.
During the SunEdison Bankruptcy, SunEdison has not performed substantially as obligated under its agreements with the Company, including under sponsorship arrangements consisting of the various corporate level agreements put in place at the time of the Company’s IPO (collectively, the “Sponsorship Arrangement”) and certain operation and maintenance ("O&M") and asset management arrangements. SunEdison’s failure to perform substantially as obligated under its agreements with the Company, including under the Sponsorship Arrangement, project level O&M and asset management agreements and other support agreements may have a material adverse effect on the Company. Despite these adverse effects, the Company operates its business without significant support from SunEdison pursuant to plans for transitioning away from reliance on SunEdison that the Company is in the process of implementing. These plans include, among other things, establishing stand-alone information technology, accounting and other critical systems and infrastructure, directly hiring the Company's employees, and retaining third parties to provide O&M and asset management services for the Company's power plants where the Company does not perform these services itself. In addition to the one-time costs of implementing a stand-alone organization, the Company will be adversely affected to the extent it is unsuccessful in implementing the relevant plans or the resulting ongoing long-term costs are higher than the costs the Company expected to incur with SunEdison as a sponsor.
The project level financing agreements for the Company’s two remaining levered power plants in India and its three power plants in South Africa contain provisions that provide the lenders with the right to accelerate debt maturity due to the