Image source: SunEdison.
Shares of yieldco
TerraForm Global Inc.
jumped as much as 15% in trading Thursday after sponsor
filed for bankruptcy. With an hour left in the trading day,
shares were up 13%.
SunEdison filing for bankruptcy wasn't all that
surprising since it's been expected for weeks. What was
noticeable was TerraForm Global's statement that it expects to
operate normally despite the bankruptcy. SunEdison performs
some operations like asset management and operations and
maintenance, but the company should be able to operate even if
SunEdison doesn't live up to contracted expectations.
What will be more important for TerraForm Global is the
outcome of debt and power purchasing provisions that could be
affected by the bankruptcy. The company has already warned
investors that SunEdison's bankruptcy could lead to forced
early repayments of debt and changes to power purchase
agreements for some of its projects. There are also the
projects in India that TerraForm Global has paid $231 million
for but SunEdison hasn't completed. How these factors turn out
in the coming months will determine the fate of the stock.
While the market is excited about TerraForm Global today, I
still see some clouds ahead. The potential changes power
purchase contracts and debt are potential land mines that may
be unavoidable. Until those questions are answered, I'll stay
out of this stock. But if TerraForm Global can navigate these
challenges and pry itself loose from SunEdison's control, it
could be a big winner for investors in the long term.
This iSecret stock could make this pop look tiny
The world's biggest tech company forgot to show you
something, but a few Wall Street analysts and the Fool didn't
miss a beat: There's a small company that's powering their
brand-new gadgets and the coming revolution in technology.
And we think its stock price has nearly unlimited room to run
for early in-the-know investors! To be one of them,
just click here
Why TerraForm Global Inc.'s Shares Jumped 15%
originally appeared on Fool.com.
has no position in any stocks mentioned. The Motley Fool has no
position in any of the stocks mentioned. Try any of our Foolish
free for 30 days
. We Fools may not all hold the same opinions, but we all
considering a diverse range of insights
makes us better investors. The Motley Fool has a
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights
reserved. The Motley Fool has a