TerraForm Power, Inc. (TERP)

[odyd 1,301]

Any dividend consideration has no merit, without filing financial statements. There will be no dividend paid until clarity is reestablished. ABY has suspended its dividend for the same reasons and they filed every time.

If you read this thread from its beginning, you will notice a lot of analysis about TERP value done, including me since November and even before Tepper. A lot of observations you made in your post have been made before. 

The point is this is not about past factors. We are not looking at an undervalued stock now being cheap without a change in fundamentals. Fundamentals of this stock are unknown beyond the list of MW in projects which will have most likely different , more expensive, debt structure. Bottom line the game has changed.  Read concerns filed by yieldco about their conditions with the bankruptcy court. Ask yourself why TERP never disclosed in PR 200MW wind farm "sold" to it by SUNEQ, which TERP showed in the asset slide. I am not sure if the BoD of yieldcos is honest. TERP cash is probably about $100 to $200M worth, at most, and also their revolver is under pressure. The cost of running a business will go up,  not counting obvious add-ons like hiring own auditor firm, accounting staff, maintenance staff, replace SUNEQ in every area. 

TERP is already impacted by SUNEQ bankruptcy. They are not providing certain services to yieldocs already; this is in their dockets. They filed a motion (yieldco) if certain loans are approved to put SUNEQ into a liquidation mode (BK7) as paying obligations to SUNEQ (for not getting services) is a waste of money, and the court made everyone pay to SUNEQ as they were running. Yieldcos also ask to be ahead of DIP lenders in a claim, this will have a hard time as they are at arm transaction with the debtor. Their independence activities have to be won in court, as the last motion filed shows. The risk of unknown trumps the facts of the past. 

 

[linkd22 1]

Do you really think the yieldco's will not file their annual 10K and 1st quarter 10Q?  Its going to be the same situation as ABY.  Just watch.

TERP isnt announcing the final closing of another 200MW because they dont have too.  They are probably busy focusing on the stuff they need to do in order to separate themselves from SUNE and manage this turbulent time they are in.  All of their moves, deals, project acquisitions, etc will be shown in their next quarterly earnings report.  

[linkd22 1]

Just compared the size of TERP's portfolio against every other yieldco.  Its massive.  And with that massive portfolio you can do a lot.  You can borrow against it, you can adjust cash flows/dividends to both pay your shareholders and/or pay down some debt.  Due to their size at this stage in the game, TERP has a lot of a options and an incredibly viable business.   

[odyd 1,301]

9 minutes ago, linkd22 said:

Do you really think the yieldco's will not file their annual 10K and 1st quarter 10Q?  Its going to be the same situation as ABY.  Just watch.

 

Have I said that? I do not think so. What I said was before any dividend is paid, they will have to file. It is only prudent to do this. Second when they do file, the financial picture will be so different that it may not be supportive, right there to paid one, until all of the financial conditions are clarified. 

I disagree that clarification will be made on the filing. First of all, it will be filing for 10-K, then Q1. this is until the end of March. Bankruptcy has not happened until April 21st. For one, there will be references and fact analysis to those references but no solutions. Without SUNEQ conditions clarified, how can their conditions be cleared? I think you can get an idea about the pace of moving forward? That pace will not improve, it will get worse when the details become important. 

I fully expect that filing will be made in the limited form at the end of June for DIP purposes. It will not substitute for the format required by the exchange. Finally,on the project, a good business practice requires disclosure on spending $240M. Global was reporting only recently independently from SUNE, so  it must have been done during early days of Q1 or late in Q4, before an appearance of independence directors, hence it was already a status quo. The impact on the cash account is the critical part, not the fiduciary duty, which has been a failure for the management of all three companies. 

[odyd 1,301]

10 minutes ago, linkd22 said:

Just compared the size of TERP's portfolio against every other yieldco.  Its massive.  And with that massive portfolio you can do a lot.  You can borrow against it, you can adjust cash flows/dividends to both pay your shareholders and/or pay down some debt.  Due to their size at this stage in the game, TERP has a lot of a options and an incredibly viable business.   

 

I am aware of the size, the discussion is not how big is the portfolio, the question is how do you extract value from it. Nobody knows that today. Holding a stock of any company is a personal choice. Holding a company with so many unknowns is simply too risky for me. I cannot manage unknown timelines and outcomes of the current structure versus SUNE bankruptcy. Others may have tolerance level and that is fine. 

[linkd22 1]

Ill throw a bit of information out for you all to digest....

1918MW = Q3 total MWs in the portfolio.

1918MW + 832MW = 2750MW.  Invenergy 1st round was 832MW.

2750MW is the total portfolio MW with 1st round of invenergy.  The cash position at the end of 3Q = 661MM.  661MM - 467MM = 194MM.  Invenergy transaction used up 467MM in CASH.  The rest was financed.  194MM in CASH is left this is excluding restricted cash.

2750MW + 98MW = 2848MW, the total portfolio MW with 2nd round of invenergy.  2nd round was 98MW.

The portfolio as of today is now 2987MW.  2987MW - 2848MW = 139MW.

TERP has added an additional 139MW to the portfolio. These were most likely other 3rd party transactions or projects they picked off their call right list from SUNE.  Either way watch out when the 10K is filed.  Youre going to see that the business is still functioning and everything is fine.  The split is in process.  The most reassuring thing you can see from TERP is some healthy portfolio additions.  Also, if you think they were "forced" into these additional drop downs, youre just being illogical and dumb.  

 

[lepv123 1]

8 hours ago, linkd22 said:

Ill throw a bit of information out for you all to digest....

1918MW = Q3 total MWs in the portfolio.

1918MW + 832MW = 2750MW.  Invenergy 1st round was 832MW.

2750MW is the total portfolio MW with 1st round of invenergy.  The cash position at the end of 3Q = 661MM.  661MM - 467MM = 194MM.  Invenergy transaction used up 467MM in CASH.  The rest was financed.  194MM in CASH is left this is excluding restricted cash.

2750MW + 98MW = 2848MW, the total portfolio MW with 2nd round of invenergy.  2nd round was 98MW.

The portfolio as of today is now 2987MW.  2987MW - 2848MW = 139MW.

TERP has added an additional 139MW to the portfolio. These were most likely other 3rd party transactions or projects they picked off their call right list from SUNE.  Either way watch out when the 10K is filed.  Youre going to see that the business is still functioning and everything is fine.  The split is in process.  The most reassuring thing you can see from TERP is some healthy portfolio additions.  Also, if you think they were "forced" into these additional drop downs, youre just being illogical and dumb.  

 

Link, thanks for the insight. I think TERP will be an opportunity too to pass up as soon as things clear up.