TerraForm Power, Inc. (TERP)

[zendoc1love 45]

Does a case being under advisement allow for the parties to come to an agreement?  Or is Chancellor Bouchard just deliberating?

Odyd, what are your thoughts about this silent period?

[odyd 1,293]

11 minutes ago, zendoc1love said:

Does a case being under advisement allow for the parties to come to an agreement?  Or is Chancellor Bouchard just deliberating?

Odyd, what are your thoughts about this silent period?

I am not sure if you have such a condition in legal matters, where you cannot communicate, I think you are dealing all the time, while there is period of deliberating the judgment.

I read a transcript from 360law, where SUNE lawyers felt they can take this matter to the trial and prove it was fairly done. I could not avoid observation that it certainly does not show fair in public materials and needs to be argued.

They also said that

"The litigation is also hampering negotiations in its proposed Vivint transaction, making it difficult to deal with the lawsuit hanging over the process, SunEdison said."

Not sure what this means, the negotiations were already concluded on amendment, so what else is being negotiated and how does this get impacted by Tepper?

[disdaniel 54]

52 minutes ago, zendoc1love said:

Does a case being under advisement allow for the parties to come to an agreement?  Or is Chancellor Bouchard just deliberating?

Parties to lawsuit can settle at anytime, judges almost always prefers this outcome since they get the day/afternoon off...

On rare occasions judges object to a settlement if they feel the courts are being used/abused (repeatedly) by one party to punish another.  Like when SEC brings enforcement actions only to settle for whopping big fines, yet defendant neither admit nor deny wrongdoing. I remember one fed judge called "BS" saying if innocent why allow SEC to extort big fine? if guilty why let off the hook?

[odyd 1,293]

I made this side by side comparison of Q3 balance sheet of CSIQ and TERP. I expect a lot more leverage showing for both. CSIQ all those recent deals showing and TERP having listing of Invenergy assets.

Anyways, if one did not know the level of income to support it, I would say that TERP balance sheet looks a lot more potent than one considered for yieldco. This is why I reason to own TERP, beside the dividend. TERP has created relatively sizable utility company, with addition of Invenergy,  bringing in around $800M in revenue per year and perhaps as much as $330M of CAFD for 2016.

note: the table is missing non-controlling interest of $44M to match the liability and equity side on TERP.

 

[odyd 1,293]

Based on the analysis of the Q4 data expectations provided by TERP, they are expected to have loss of 34M. However, adding $50M to CAFD of $225M for the full year. That CAFD goes to $275M in 2016 and does not include Invenergy. 2016 net income is $56M on $525M revenue. I think that 930MW can add 50% of that number or more since wind assets have better capacity than solar. 1.9GW able to produce $525M, 2.7GW can produce around $800M.

I would expect positive Q4 presentation focusing on CAFD and maybe dividend growth. The money is there, but who knows how they will play it.

[odyd 1,293]

I am seeing the judge presiding over Appaloosa case, working on petitions on the 25th. If this is the response to request of injunction, you would have two cases ruled on the same day. Interesting.

[saush11 38]

Moody's downgrade, siting bankruptcy remote but possible.

https://www.moodys.com/research/Moodys-downgrades-TerraForm-Power-and-TerraForm-Global-to-B3-CFR--PR_344232?WT.mc_id=AM~WWFob29fRmluYW5jZV9TQl9SYXRpbmcgTmV3c19BbGxfRW5n~20160224_PR_344232

[zendoc1love 45]

Does anyone have access to the final ruling transcripts?  I would like to look over all the verbiage.  Odyds quotes appear to be a win for TERP.  Although the immediate injunction was denied SUNE has been given a warning and will proceed with much caution.  This whole process has made TERP stronger IMO.  Governance issues hinted at but not directly addressed.  Want to see Bouchards direct quotes and hear from Appaloosa as well.

[explo 617]

On 26 februari 2016 at 4:59 PM, zendoc1love said:

Does anyone have access to the final ruling transcripts?  I would like to look over all the verbiage.  Odyds quotes appear to be a win for TERP.  Although the immediate injunction was denied SUNE has been given a warning and will proceed with much caution.  This whole process has made TERP stronger IMO.  Governance issues hinted at but not directly addressed.  Want to see Bouchards direct quotes and hear from Appaloosa as well.

I agree. The important thing is that the spotlight is on the transactions between parent and yieldcos. Deviation from fair price will be harder for SUNE now.

I also think that the amended December terms compared to original July terms are not discussed enough. Tepper was right before the amendment, but SUNE can argue that they already fixed the issue by significantly improving the terms for TERP. Also corporate governance case is hard to make against SUNE, since they increased the number of independent directors to a majority on the TERP and GLBL boards (although the non-independent ones are definitely very interest conflicted).

 

[odyd 1,293]

What a week.

Both events had their conclusion. So the predictability there was good. The fact that LAP is negotiated but its hearing is pushed to 22nd, is very unlikely to be considered as a show stopper to the merger.

I hoped for the termination of Vivint transaction. Those were my independent thoughts being hopeful seeing other terminations. Still I bought TERP for dividend as an equity worth having under merger. The transcript of SUNE memo, showed how fragile SUNE was if TERP enjoined. It would be so messy that I ended to preferring loss of this injunction. It was a lesser evil approach and I am glad it turned this way, despite of fear it will cost me, even though in a short-term.

The event that injunction was bad on a stock lasted 6 or so hours, We may see weakness there yet, but this particular one is done. Tepper is not done, and I hope he will take part of managing affairs of TERP by getting a seat using the finding of the ruling on November 20 replacements.

What I am disappointed at is that SUNE had no plan. After win, they are still holding everyone hostage on Q4 releases. SUNE is in disarray  in my opinion and the gains of the last two days can easily turn in retraction.

So worry about the impact of loss in injunction moves now to what happened to my dividend and how long I have to wait to know it. Second one , of lesser important now, is what is Tepper's move. I hope he will concentrate on managing the company aspect which means improving the deal rather than stopping it. More MW, lesser commitments, better transparency, independent management from SUNE etc. This would be prudent and valuable to me.

I am still on the plan with TERP, this is 2 dividend pays and Q3 buying most likely Canadian one for one hopefully. This means TERP would be over $20 and CSIQ would at this or a bit lower price. Bold prediction and seemingly impossible when looking at the prices now.

I see that my perspective was not a good one for first Q 2016 so cannot argue about being right. What I did to avoid trouble in CN4, turned to be a greater trouble, just by looking at the stock performance for YTD. I guess doing something different made exactly the same result as any other year ending at this point with depreciated account value and wondering about the future.

 

 

[zendoc1love 45]

Agree with your analysis.  SUNE is still very vulnerable.  How Tepper proceeds will be very telling. Bouchards statement about BODs reveals culpability on SUNEs part.  How both parties proceed from here is THE most important part of this process.  No declaration of dividend is just sloppy IMO.

My PPS for TERP is in the 8's, so I feel ok as long as we get dividends paid out.  I would be happy to hold Yieldcos long term for income if they stabilize.

Best to all

[lepv123 1]

53 minutes ago, odyd said:

I see that my perspective was not a good one for first Q 2016 so cannot argue about being right. What I did to avoid trouble in CN4, turned to be a greater trouble, just by looking at the stock performance for YTD. I guess doing something different made exactly the same result as any other year ending at this point with depreciated account value and wondering about the future

If TERP can eventually make its way back to the teens, you should be in good shape. What are your feelings (optimism/pessimism) on TERP now? Where do you see it going?

[odyd 1,293]

2 minutes ago, lepv123 said:

If TERP can eventually make its way back to the teens, you should be in good shape. What are your feelings (optimism/pessimism) on TERP now? Where do you see it going?

I am still on the plan with TERP, this is 2 dividend pays and Q3 buying most likely Canadian one for one hopefully. This means TERP would be over $20 and CSIQ would at this or a bit lower price. Bold prediction and seemingly impossible when looking at the prices now.

[lepv123 1]

1 minute ago, odyd said:

I am still on the plan with TERP, this is 2 dividend pays and Q3 buying most likely Canadian one for one hopefully. This means TERP would be over $20 and CSIQ would at this or a bit lower price. Bold prediction and seemingly impossible when looking at the prices now.

 

That would be awesome! It's just to low to consider anything else but to hold and/or accumulate TERP at this price.

[odyd 1,293]

I just read this article.

http://seekingalpha.com/article/3934216-spite-judges-order-sunedison-may-terminate-vivint-deal

According to this author, SUNE is going to terminate the deal to merge with Vivint. However, becasue that would mean cost and putting Vivint into bankruptcy, TERP will be used as an scapegoat and buy Vivint assets anyway, just becasue it can.

I guess this would make more sense and would not be considered SUNE self-dealing any more. It would be an act of selfless charity to safe Vivint.

[odyd 1,293]

3 hours ago, zendoc1love said:

Agree with your analysis.  SUNE is still very vulnerable.  How Tepper proceeds will be very telling. Bouchards statement about BODs reveals culpability on SUNEs part.  How both parties proceed from here is THE most important part of this process.  No declaration of dividend is just sloppy IMO.

My PPS for TERP is in the 8's, so I feel ok as long as we get dividends paid out.  I would be happy to hold Yieldcos long term for income if they stabilize.

Best to all

It is not as bad as I made it sound. I have some shares in $8s and they are green but right now I am 23% down on my portfolio, since it is TERP only. If dividend is paid at current 16% it is not bad. I of course see this to be a lot more rewarding with stock price going up.

I may sound irrational but I see dividend to go up, and perhaps become around  8 to 10% yield in 6 months. At over $20 TERP will be selling shares.

 

[saush11 38]

42 minutes ago, odyd said:

It is not as bad as I made it sound. I have some shares in $8s and they are green but right now I am 23% down on my portfolio, since it is TERP only. If dividend is paid at current 16% it is not bad. I of course see this to be a lot more rewarding with stock price going up.

I may sound irrational but I see dividend to go up, and perhaps become around  8 to 10% yield in 6 months. At over $20 TERP will be selling shares.

 

Why do you say "if dividend is paid"? Am I missing a scenario when dividend may not be paid? I honestly do not see any. But I have been grossly wrong in the past 2 months and have lost a fortune.

[odyd 1,293]

58 minutes ago, saush11 said:

Why do you say "if dividend is paid"? Am I missing a scenario when dividend may not be paid? I honestly do not see any. But I have been grossly wrong in the past 2 months and have lost a fortune.

Dividend will be paid when one is announced. Shall I say when is paid? The only scenario of getting dividend is when there is a release describing it. Without release on this statement of "if" is probably more appropriate. I have no indication that there is not going to be one either, I just do not want to say things if they are not confirmed at this point.

[saush11 38]

Ok thanks for the clarification , Odyd.

[odyd 1,293]

55 minutes ago, saush11 said:

Ok thanks for the clarification , Odyd.

Have you talked to PR form TERP or GLBL recently? You said something was happening on Monday?

Can you provide a bit detail what that was?

[saush11 38]

6 minutes ago, odyd said:

Have you talked to PR form TERP or GLBL recently? You said something was happening on Monday?

Can you provide a bit detail what that was?

The IR guy is the same for both the companies. He said that  for TERP they would release "tentatively" the coming week, with Monday the most probable date. But he said that the date would be published on website. But nothing has so far been published.

From what I understood, they are mandated to release the TERP results by the end of next week, unless they ask for extension. 

GLBL on the other hand, since it is first full quarter , has extra time till 

March 31st. In essence my last conversation gave me no new information.

My own gut from reading between the lines is that TERP results are ready, but they don,t want to release until GLBL is ready.   They want the ex-dividend date for both the securities to be the same. He did not want to share the specifics of the reasons behind GLBL delay. 

In case only TERP  is announced next week, the dividend payout could be April,  instead of March, to match with GLBL EX-dividend date delay.

I repeat though, that the last two paragraphs, are my own gut based on my chat. He did not state any of this explicitly.

 

[odyd 1,293]

Thank you this very informative Saush. I do not mind when dividend is paid as long as one is announced. The market and this forum needs dividend confirmation.

[saush11 38]

2 minutes ago, odyd said:

Thank you this very informative Saush. I do not mind when dividend is paid as long as one is announced. The market and this forum needs dividend confirmation.

I had longer chats with him on GLBL dividend than TERP. He said if we don,t pay the 1.1 dividend, it essentially will accumulate  before we pay to class B shares. He was alluding to the fact that it is in the interest of SUNE to pay, else they don,t get paid.

The only thing he never wanted to answer was what happens if SUNE does  not deliver India projects. 

A question to you Odyd, which I have not found an answer from my reading. Is there any recourse for GLBL, if SUNE does not deliver the projects sand in the currents SUNE situation, the Indian government cancels the project.

Thanks.

[odyd 1,293]

GLBL has a clause not to take on the project if it is not completed on expected date ( my belief). It was written in the agreement. Yet SUNE took most of the money however. I am not familiar what would happen in India, but I doubt SUNE would not build those projects.

[explo 617]

Good discussion. Forget the parent relationship a bit and its speculative influence over subsidiaries in the future. Is one risk in current state of affairs where yieldcos can be seen as customers and SUNE as supplier that GLBL has made more prepayments for assets yet to be delivered (than TERP) and that those prepayments (liabilities maybe not honored in case of BK on SUNE BS, assets at risk on GLBL BS) now carry a high credit risk due to SUNE's financial problems?