Both the TerraForm yieldcos have delayed their Q2 2016 results. It is the third successive quarter without financial filings by both TerraForm Power and TerraForm Global.
The bankruptcy of parent firm SunEdison was again a contributing factor. Previous results were held back owing to “material weaknesses” identified by SunEdison in its systems and procedures.
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In near-identical notices to the NASDAQ stock exchange, the companies said: “We are continuing to assess whether matters related to SunEdison’s delay in its Form 10-K (including (a) SunEdison’s identification of material weaknesses and additional procedures necessary to complete its annual financial statements and related disclosures and (b) the publicly disclosed findings of the investigation by SunEdison’s independent directors and the related remedial plan) could affect our financial reporting and related internal controls.
“We are working to remediate these issues as promptly as practicable. Based on our work to date and in light of other factors, including the risk that SunEdison will be unable to complete the remedial actions related to its internal investigation, we expect that it will be necessary for the Company to implement additional controls and procedures and take other remedial actions before we finalize our financial statements and other disclosures for the year ended December 31, 2015.”
While not directly owned or managed by SunEdison, both yieldcos depend on the bankrupt developer as their sponsor via a management services agreement (MSA). Under the terms of that contract SunEdison provides a number of administrative and support services.
In the wake of April’s bankruptcy announcement, Terraform Power said it expected to continue working with SunEdison and said there was no identifiable risk to existing power purchase agreements (PPAs). It did warn that should the MSA be cancelled, the cost of replacing it would be “substantial”.