TerraForm Global warns of danger ahead in 2015 filing

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SunEdison’s two yieldcos have gone through substantial trouble following the bankruptcy of their sponsor. However, according to a long-overdue 2015 annual financial filing, yieldco TerraForm Global (NASDAQ: GLBL) was already in trouble in the fourth quarter of 2015.

pv magazine staff was not able to fully analyze the 195-page filing by press time, and additional information will be provided on a conference call on January 9. However, the top line numbers are troubling. Over the full year 2015 TerraForm Global brought in $124 million in revenue, but reported an operating loss of $224 million and a net loss of $371 million.

The big difference between the operating loss and net loss is $108 million in interest expense, and Global has reported difficulty raising capital at affordable rates since the fall and bankruptcy of SunEdison.

The largest losses in 2015 are also due to the fall of SunEdison. Over the course of the year TerraForm Global reported $231 million in expenses – which alone put it into the red on an operating basis – due to deposits on 425 MW of SunEdison projects in India which Global says were supposed to be transferred to it, but which were never completed. At the end of 2015 these had to be written off as losses.

In September, TerraForm Global agreed that these projects could be sold to a third party, and as a result of this agreement will receive a share of the proceeds. The yieldco has dropped all claims agains the projects but has filed a total of $2 billion in claims against SunEdison.

TerraForm Global, along with fellow yieldco TerraForm Power are attempting to reach an agreement with SunEdison outside of court on these matters, while both are seeking new buyers. The company again reiterated this in a brief press release, stating that it has a “well-defined process underway with potential bidders”.

Global previously predicted a relatively minor level of losses in 2016. However, in its 2015 annual report the company warned that the combination of the risk of being drawn into the SunEdison bankruptcy and its debt and bond obligations “raise substantial doubt about the Company’s ability to continue as a going concern”.