TerraForm Power, Inc. (TERP)

[explo 617]

Good read, thanks.

http://seekingalpha.com/article/3850846-legal-fight-stop-purchase-vivint-assets-impacts-terraform-sunedison

 

[Pop2mollys 412]

4 hours ago, explo said:

Good read, thanks.

http://seekingalpha.com/article/3850846-legal-fight-stop-purchase-vivint-assets-impacts-terraform-sunedison

 

I second that!  Nice article Odyd 

[odyd 1,293]

Thank you both. I think it is ok. Normally I would invest time to show value of assets, but in reality the hearing and what happens next is going to be interesting. I wanted to share that holding TERP in my mind has value. Thanks Pop for noting the buy in CSIQ elsewhere. Yes it is nice to move in a different direction than TERP as I hope to create an opportunity fund in case Tepper does not get injunction.

I like CSIQ, I wish for last couple of years company got more recognition. Maybe one day.

[odyd 1,293]

I am surprised that Jobin seems to have such a strong conviction that SunEdison is a motivated seller or needs to sell. Why?

If SunEdison would sell to a third party, and took a loss, it would mean to me that from the beginning TERP was dealt a bad hand. Selling to a third party would avoid ordeal of injunction and court case, sure, but I hear so much comments that SUNE was righteous so why do a garage sale?

Is keeping VSLR on hold, becasue of legal complications, cause of the concern to Blackstone? Would Vivint fall apart on Q4 release? This is why SUNE needs to sell at the loss?

I feel that unless merger is closed we may have some delay in publication of results for all parties. There is a possibility, slim but still, that SUNE could screw things up with dividend to punish Tepper if he got injunction. Seems simple-minded but it may happen.

Is it possible or not, what seem to be natural, to sell TERP those assets at $1.49 as Jobin suggests, instead of finding the third party? How would this affect rest of the dollars in a deal? All SUNE would have to do is to add 68MW of own projects under the price tag of $799M, they have over 3GW in development.

There is point in financial transactions where unfair or loss turns into a fair or gain depending on price tag. if the pricing is at the market levels of $1.50 I think Tepper could drop the suit. Rightful correction would gain admiration among the WS leading to a win-win scenario for both.

Interesting for sure....

 

[Jetmoney 23]

I like the scenario of Sune adding 68MW to the price tag.  Like you said that would be a win-win for both Terp and perhaps even Sune.  Do you think this is an option they are considering?

[odyd 1,293]

probably not in this specific way, but maybe they are negotiating something. I really hope.

[Jetmoney 23]

Wow, TERP baby.  Are you ready to swing back to CSIQ yet?

[odyd 1,293]

A quote taken from one of the posters on SA, This is from the PACER a site with access to court public records. I am not sure if it is real but this is what Tepper apparently claims

"The July Purchase Agreement allowed TERP to terminate the transaction if SunEdison amended the terms of its Merger Agreement with Vivint prior to closing. As explained below, when the agreement between SunEdison and Vivint was amended, and the Conflicts Committee explored whether to invoke this right to back out of this unfavorable transaction, SunEdison used its controlling shareholder position to replace the members of the Conflicts Committee and to appoint successors who would rubber-stamp the transaction."

Right there you have all of those members quitting the board, the same people who were on the board when deal was signed. They had opportunity to revise and they were not given that, clearly wanting to back out of the transaction.

This is a huge thing if accurate.

 

 

[Jetmoney 23]

Do you happen to know what were the terms that was amended?

[odyd 1,293]

Do you happen to know what were the terms that was amended?

They are in amendment from December, nothing for TERP. That is the point, only third party sales were added.

[pg6solar 85]

I saw this article on SA. What is not clear to me is why it was quoted as a fact in that article when its clear to me (per my recollections) that the amendment (to lower purchase price for SUNE with Blackstone financing) took place after the board resignations. If it took place before board/CEO replacements, then yes its huge, but I believe it was not. Didn't amendment take place after Tepper disclosed his TERP positioning with the first letter to SUNE and TERP immediately climbed 40% in a day? 

Edit: it appears that amendment did take place in November (before the Tepper letter of December 1st) and that's caused replacement of the board and CEO. Then Tepper's letter followed.  

Edited 6 February by pg6solar

[odyd 1,293]

I am rewriting my post. PG try to focus on the fact that SUNE is negotiating in November. One of the July agreements has a clause for TERP possibility to walk out of the deal if amendment is being made.

Amendment is being negotiated and TERP wants to walk. Chatila fires rebels. Rest quit. days later agreement is published.

Firings Nov 23,

Tepper first letter Nov 25,

Amendment published Dec 9, all benefits to SUNE, none to TERP price is same per watt. Take/pay agreement warranting $300M to SunEdison covered with assets of TERP and forcing TERP to buy Vivint. Third party smoke sale just to put something to take the TERP of the hook, no commitment from SUNE to deliver anything.

[pg6solar 85]

Yes Odyd correct (I looked up dates after posting, instead of before), thanks. Obviously Tepper is not an idiot nor employees any. If they filed the lawsuit, they must have had a high confidence in a successful resolution for Appaloosa.  Only a week left till preliminary.

[odyd 1,293]

If you read Tepper's lawsuit., it is about amendment and not July agreement. This is where all cheerleaders for SUNE bringing up his stock ownership. The Pension fund owned those shares in July and they are arguing July agreement.

Tepper is not a dummy, he brought legit timeline and he will have witnesses, those who quit to testify that they were fired over refusal to agree. SUNE is toast n my opinion. This is dismissal in bad faith and is a self-dealing in the most obvious way. I bet Tepper was called and hinted about it. This is why he started probing about getting minutes of the meetings etc.

 

[odyd 1,293]

Drama continues. On Nov 30th, Tepper takes the stake of 9% in TERP. He writes a letter on Nov 25th to TerraForm, part of this letter is quoted below. He is hoping for the committee to do exactly what they did not do, or he claims in the suit they were forced out  becasue they wanted to do.

The letter does not have precise description, but it is hard to avoid conclusion, he already knew this was done and he bought more shares to create argument from it. This purchase would need to be defended from aspect of legality and non-disclosure. What do you think?

"Recent rumors of discussions between SUNE and VSLR regarding "strategic options" for the proposed merger transaction, if true, may represent an opportunity for the Committee to exercise its independence and relieve the financial pressures on both TERP and its "Sponsor" from this harmful transaction. Such efforts would be strongly supported by Appaloosa.

As previously suggested, substantial further disclosures are incumbent on TERP so that investors can assess the full impact of the pending transactions, the relationship between TERP and its "Sponsor", and the circumstances surrounding the changes in TERP's management and Board. We look forward to such disclosures and stand ready to meet and discuss any of the issues raised by this letter.  In the meantime, we expect the Board and the Conflicts Committee to respect and defend the integrity of TERP's corporate identity and the interests of its stakeholders.  We reserve all rights accordingly."

[Jetmoney 23]

If he knew what was done and bought shares after, it is hard to defend.  Besides, if he bought shares on November 30th, he got them very cheap, near bottom.  I was hoping he got shares at much higher prices.  That would make a better argument for his loss.

[disdaniel 54]

I still do not know why Chatila is willing to risk all of SUNE (and screw TERP and GLBL) to buy Vivint for way too much even in Nov./Dec. It is just crazy.

If the timeline is as noted above, I think he has to settle with TERP/Tepper--if this goes before judge Chatila will lose his job (he may anyway) and maybe his freedom.

 

[pg6solar 85]

Lets take an other look at it:

1. On Nov. 23rd TEPR's BOD is replaced/quite. Its top management team (including CEO) is replaced by SUNE's "team". (Same CEO for GLBL).

2. TERP' PPS continues to plunge hitting lows on Nov. 25th (last day before ex-dividend date) only to be repeated on Nov. 30 (apparently when D. Tepper took his real stake in TERP). Heavy volume on Nov. 24th, 25th and 30th.

3. Appaloosa's letter to SUNE is not made public until Dec.1st when stock surges as much as 43% intra-day and closes up 32%+. With that letter, Tepper's large stake in TERP is made public as well (its unclear when exactly, but most likely (based on volume) on those three dates as mentioned at the end of #2 above). 

4.  On Dec. 9th, SUNE and VSLR reach an amendment to the July, 2015 agreement. TERP rises an other 23% on heavy volume. SUNE surges on heavy volume, but not as much as TERP.

5. On Dec. 16th, TEPR announces acquisition of Invenergy, but its SUNE that surges 25% on huge volume.

6. On Dec. 22nd, Appaloosa wants to inspect SUNE's books - SUNE is down as much as 32% on an incredible volume.   

7. On Jan. 7th, SUNE plunges on mother of all times volume on "financial engineering". 

8. Finally, on Jan. 13th, Appaloosa sues SUNE to block VSLR acquisition.  Since this date up to now, both PPS and volume for both TERP and SUNE stay more or less constant (no large swings).

 

Based on the above time line, it is clear that Appaloosa took its position after TERP's board/CEO replacements, but before the Amendment. IMHO, timing is too good to be true and it had to be on non-public info (board/CEO were replaced due to coming, but not publicly known at the time, SUNE/VSLR Amendment not favorable to TERP). Appaloosa is not stupid, but I do not think SUNE is stupid too. Some one needs to create an HBO show on this drama. 

 

 

 

[zendoc1love 45]

Tepper had holdings in TERP prior to Nov 23rd.

 

[pg6solar 85]

Yes, i saw somewhere that he had a"token" (for him) position prior to Nov. 23rd (or was it Nov. 9th?). Would be great to know for sure when the bulk of his position was taken  - prior to Nov. 23rd or after. Again only IMO, if it was before than he has a great chance and SUNE is a no touch, but if its after Nov. 23rd, I'm certainly buying SUNE (general market permitting) prior to Feb. 16th. 

[zendoc1love 45]

1.2 million shares prior to 11/23/16 certainly entitles him to a say in things.

Here is a nice article from twitter with a timeline that documents his TERP purchases:

http://ibankcoin.com/graystoke/2016/01/13/too-sune-to-tell-terp-vslr/

[pg6solar 85]

Yes, this confirms that Appaloosa bought the absolute majority of their holdings (almost 90% of the total position) AFTER the 23rd of November. What happened at TERP on 23rd was a red flag - but they bought (as I did for different reasons of course). Based on that his "win" on the 16th is not assured. For obvious reason (with many others here) I'm very interested in how it all will get resolved. 

[odyd 1,293]

We are concerned that he knew what was happening and bought shares to argue the wrongdoing. How about he sincerely did not not know, bought shares after firing thinking that TERP was still good investment but got concerned at the same time, and rumors caused him to ask what happened. He had written some very specific references knowing the legal abilities and obligations of the committee so maybe he was communicating or was hinted things turned upside down and decided to get involved, is this illegal?

Is it illegal to try change course of the event knowing that direction is wrong?

We do not know a lot of details here, but to me this is so rudimentary that I think it would not be played if it was so simple to argue by SUNE.

 

[pg6solar 85]

Legal or not, ethical or not, is not my concern at all. I could not care less. WS does what it does, like it or not, it is what it is, period. (If some do not like it, good luck voting for Sanders).

What is important, is to gage as much as possible the timing of additional (or new) position in TERP as related to Feb 16th -  before (meaning TERP appreciate immediately after - Appaloosa is successful) or after (meaning TERP drops - SUNE "wins"). Obviously no knowing, I'm planning to add TERP next week if general market drops it into at least mid $8s while keeping plenty of cash for after if its in $7s after the 16th.

Of course SUNE could be a great risk/reward play here if it comes up on top on the 16th, in which case SUNE should be bought (BK is unlikely as they just can keep on selling "assets" including TERP and/or GLBL since they have so much control over them), which I'm also planning to do next week if market allows it to drop to $2 (or close to) again.     

 

[odyd 1,293]

6 minutes ago, pg6solar said:

Legal or not, ethical or not, is not my concern at all. I could not care less. WS does what it does, like it or not, it is what it is, period

Sorry but the statement had to be made in haste. Legal or ethical or any variation is what can impact the result of the hearing. Being able to predict "what" with certain level of accuracy is going to save one money, WS can make all different mistakes in this interpretation. However, WS will certainly do things based ob legal, ethical and overall condition. I am not sure one could separate WS "doing" from those aspects..