By Fallout from the troubles of bankrupt solar power developer SunEdison Inc. is starting to hit its publicly traded corporate spinoff, TerraForm Global Inc., in the form of pressure from lenders over delayed financial reports. An owner of alternative energy projects developed by SunEdison, TerraForm Global has said it’s solvent but unable to file audited financial statements on time. The delay has banks, and now bondholders, lining up to set deadlines to get answers about TerraForm Global’s 2015 financial results. SunEdison filed for chapter 11 bankruptcy protection in April, amid questions about its finances and facing federal probes. Along with another former SunEdison subsidiary, TerraForm Power Inc., TerraForm Global has said it’s on solid ground and taking steps to insulate itself from SunEdison’s bankruptcy. However, the TerraForm companies have not yet been able to produce audited financial reports for 2015, due to shared accounting systems with SunEdison. Banks last week cut back TerraForm Global’s ability to draw against a revolver, but agreed to extend the time for TerraForm Global to file audited financial statements for 2015. On Wednesday, a subset of bondholders that invested in a $760.4 million issue of debt gave notice they want to see the books, too. Failure to deliver audited financials on time opened the door to a notice to TerraForm Global Operating LLC that it has 90 days to deliver the audited financials, or the company may be in default. So while there is no default at present, bondholders have let it be known they, like the banks, are waiting for a look at TerraForm Global’s finances. Bondholders “remain committed to continuing an open dialogue and working productively with the company toward a resolution in the interests of all stakeholders,” said a release from Willkie Farr & Gallagher, the law firm representing the bondholders . A lawyer and a spokesman for TerraForm Global could not immediately be reached Thursday to discuss signs of growing lender impatience. TerraForm Power has also negotiated extensions with its lenders, Securities and Exchange Commission filings say. Moody’s Investors Service said last week that there is only a small risk the TerraForm companies will be dragged into SunEdison’s bankruptcy. “It is unlikely that lenders would cause otherwise solvent” TerraForm companies to file for bankruptcy because of a technical issue related to financial reporting, Moody’s analysts said. But each time the companies have to ask for more time to report 2015 numbers, the concessions lenders are able to extract potentially become more costly. A former unit of SunEdison that was launched into the public market last year, TerraForm Global blames SunEdison’s delayed accounting for its inability to present audited 2015 results. In addition to SEC and Justice Department investigations, and a request for a bankruptcy probe, SunEdison is also facing a lawsuit from TerraForm Global, which has accused its former parent of diverting $231 million earmarked for power projects in India to shore up SunEdison’s shaky finances. SunEdison spun out the TerraForm companies as separate entities, dubbed yieldcos, as part of the financial engineering that allowed it to boom into one of the world’s largest developers of alternative energy projects. Last year the market lost confidence in SunEdison, as the amount of debt it was carrying ballooned, and the deals that fueled its growth began to elude it. SunEdison owns about 35% of each of the TerraForm companies. Write to Peg Brickley at peg.brickley@wsj.com
Solar energy company SunEdison 's recent bankruptcy has led to members of its subsidy company , Solar Global Inc. , to increase pressure on it 's executives to produce financial reports . Banks and bondholders have begun to suggest deadlines for the company to file the currently delayed 2015 audited financial statements . TerraForm spokespeople have continued to assure banks and bondholders that the company is solvent , and while they remain positive and supportive of the company , if TerraForm can not deliver its audited financials in the specified time , the company may be placed in default .