Companies don't make $30+million acquisitions if the are contemplating bankruptcy. This deal supports the concept that GLBL is an independent company with it's own assets and cash flow and can continue a profitable business even if SUNE files chapter 11 bankruptcy. The stock is real cheap!
As a holder of TERP, I thank God every night for David Tepper. If not for Tepper, the incompetents running SUNE would have taken down TERP along with SUNE.
Took a look at the 8K Teraform Global filed today with the SEC. Makes one wonder how SUNE can possibly avoid Bankruptcy. Global said, in the filing, that they do not expect to file their 10K by March 31 and I assume SUNE will be in the same boat. SUNE is behind completing a number of projects which are supposed to be dropped down to Global some of which Global has partially paid for. I don't see how any entity would enter into a new business relationship with Sun.
Prepackaged Banhruptcies are often announced following the close of business prior to a long weekend. This is also true for other financial news, such as new restructured financing. This allows markets to digest news and allows Mgt. to contact important customs and explain how the news impacts them. SUNE has been silent for a long time despite market rumors. Watch the news tonight to see if SUNE has a press release.
Very bad news, indeed. Company does not deny that it is in discussion about obtaining Debtor in Possession financing, which, by definition has to follow a bankruptcy proceeding.
Because the Banks are acting as Trustee in behalf of the Bondholders they cannot easily waive any type of default. They are in a fiduciary relationship whereby they must do everything to protect the interest of the Bondholders. They have to examin case law and decide what action is in the best interest of the Bondholders as will be seen by a court with 20/20 hind site. As we get close to month end SUNE will either produce a 10k or have to disclose the potential default. The next logical step would be bankruptcy.
Bank loan agreements and loan documents contain provisions for timely submission of financial statements that frequently coincide with SEC requirements. TERP and SUNE will go into default on these agreements as soon as the 30 day grace periods end. Such an event is likely to bring down the house of cards with bankruptcy a likely outcome!
TerraForm, SunEdison and Global are withholding financial information from investors. They have not disclosed Q4 results, their intension regarding dividends, when they plan to close the VSLR deal or the outlook for 2016. Companies don't withhold good news so they are hiding bad news as long as they can. It could be that their outside Auditors have discovered problems and are insisting on a "Subject to" or "Going Concern" oipinion for SUNE, TERP or all three. It is impossible to tell what they are hiding and why they have "lock jaw" but something is wrong. The WSJ got it right when they said "that it is too early to celebrate".
Company has lock jaw. Sune, Terp and GLBL have not released financial information or dividend information in the case of the latter two. Could be waiting for a decision on pending litigation OR SUNE is trying to put together a prepackaged bankruptcy plan which would likely be announced in lieu of earnings. Such plans are frequently announced on Friday after the market closes.
Bankruptcy is definitely possible. The rumor feeds on itself as prospective clients are reluctant to give new business to Sune i.e. the Hawaii project cancelled by the power company. Also creditors are less likely to extend payment terms and demand COD which drains Sune' liquidity. The delay in releasing financial information also feeds the rumor mill.
Sune may be in the early stages of a death spiral that leads to bankruptcy. A large regulated utility would not cancel a purchase power contract without very good reasons. Sune had lined up purchasers for the completed projects and only had to complete the projects in order to receive cash proceeds from their sale. My only conclusion is that they could not raise the working capital to complete the projects. This will severely harm their ability to obtain new projects and may cause other cancellations.
Last quarter TERP announced its $.35 dividend on Nov. 10. By implication, an announcement on the 1st. qu. dividend is due and if we don't have an announcement soon I smell a problem. GLBL is in the same position.