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SEC Filings

10-Q
TERRAFORM GLOBAL, INC. filed this Form 10-Q on 06/27/2017
Entire Document
 

As discussed in Note 1 - Nature of Operations, on September 25, 2016, the Company filed its initial proof of claim in the SunEdison Bankruptcy case, which was amended on October 7, 2016. This proof of claim asserted claims based on, among other things, SunEdison's breach of the Sponsorship Arrangement between the Company and SunEdison, which included the Interest Support Agreement. The Interest Support Agreement will be terminated upon the effectiveness of the Settlement Agreement.

Equity Interest Purchase and Sale Agreement for 425 MW India Projects
See Note 4 - Deposits for Acquisitions for information regarding the 425 MW India Projects.
Operation and Maintenance (“O&M”) and Asset Management Services
O&M services, as well as asset management services, were provided to the Company by affiliates of SunEdison pursuant to contractual agreements. Costs incurred for these services were $3.8 million and $5.0 million for the three months ended March 31, 2017 and 2016, respectively, and are reported as cost of operations in the unaudited condensed consolidated statements of operations. These agreements were all terminated as of April 1, 2017.
Engineering, Procurement and Construction Contracts and Module and Tracker Warranties
SunEdison served as the prime construction contractor for most of the Company’s power plants that were acquired from SunEdison pursuant to engineering, procurement and construction contracts with the Company’s project companies. These contracts are generally fixed price, turn-key construction contracts that include workmanship and other warranties with respect to the design and construction of the power plants that survive for a period of time after the completion of construction. These contracts or related contracts (including O&M agreements) also often include production or availability guarantees with respect to the output or availability of the power plant that survive completion of construction. Moreover, the Company also generally obtained solar module and tracker warranties from SunEdison, including material and workmanship warranties and output guarantees, for those solar power plants that the Company acquired from SunEdison that utilized SunEdison modules or trackers, as applicable. The SunEdison Bankruptcy will likely reduce or eliminate the Company’s potential recoveries on claims under these agreements and warranties, and all such claims or potential claims will be released upon the effectiveness of the Settlement Agreement.
Due to/from SunEdison, net
Certain of the Company’s expenses and capital expenditures related to construction in process are paid by affiliates of SunEdison and are reimbursed by the Company to the same or other affiliates of SunEdison. As of March 31, 2017 and December 31, 2016, the Company owed SunEdison and its affiliates $9.8 million and $16.1 million, net, respectively.
Depending on the nature of the activity, amounts are either reflected in operating activities or as a non-cash addition to power plants included in Due to SunEdison, net. Additionally, SunEdison provided contributions to the Company in the form of stockholder loans. Related amounts have been recognized as additional paid-in capital as there is no expectation for the Company to repay SunEdison for the contributions related to stockholder loans. These contributions totaled $7.8 million and $25.6 million for the three months ended March 31, 2017 and 2016, respectively.
Incentive Distribution Rights
Immediately prior to the completion of the IPO on August 5, 2015, Global LLC entered into the Fourth Amended and Restated Operating Agreement of Global LLC, which granted SunEdison 100.0% of the incentive distribution rights (“IDRs”) of Global LLC. IDRs represent the right to receive increasing percentages (15.0%, 25.0% and 50.0%) of Global LLC’s quarterly distributions after the Class A units, Class B units and Class B1 units of Global LLC have received quarterly distributions in an amount equal to $0.275 per unit (the “Minimum Quarterly Distribution”), and the target distribution levels have been achieved. As of March 31, 2017 and December 31, 2016, SunEdison held 100.0% of the IDRs. SunEdison has pledged the IDRs as collateral under its DIP financing and its first and second lien credit facilities and second lien secured notes. SunEdison has granted the Company a right of first refusal with respect to any proposed sale of IDRs to a third party (other than its controlled affiliates), which the Company may exercise to purchase the IDRs proposed to be sold on the same terms offered to such third party at any time within 30 days after it receives written notice of the proposed sale and its terms.

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