TerraForm Global and Sunedison Inc are in trouble and the news does not sound good. Terraform filed a warning that it plans to delay reporting its 10k due to weakness related to Sunedison. SunEdison
As we quipped yesterday after “The Rockefeller Brothers Fund” made a fake bid for SunEdison and later WSJ reported that the company was under SEC investigation ….
— ValueWalk (@valuewalk) March 28, 2016
Specifically, the WSJ states:
The Securities and Exchange Commission is investigating SunEdison Inc.’s disclosures to investors about how much cash the solar-power company had on hand as its stock price collapsed last year, according to people familiar with the matter.
Officials in the SEC’s enforcement unit are looking into whether SunEdison overstated its liquidity last fall when it told investors it had more than $1 billion in cash, the people said.
Sunedison Inc shares are now down 42 percent in pre-market trading to around $1.30. TerraForm Global Inc is down 16 percent to $2.50 a share, Below is the latest filing from Terraform.
TerraForm Global, Inc. (“TerraForm Global”) anticipates that the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2015 will be delayed beyond March 30, 2016. We expect to file a Form 12b-25 on or prior to March 30, 2016.
On February 29, 2016, SunEdison (NYSE: SUNE), a Delaware corporation and our controlling shareholder, filed a Form 12b-25, Notification of Late Filing, regarding the delayed filing of SunEdison, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015. SunEdison, Inc. announced that its delay in filing its Form 10-K was principally due to (1) the need to complete all tasks and steps necessary to finalize the annual financial statements and the other disclosures required to be included in that filing, and (2) ongoing inquiries and investigations by the Audit Committee of its Board of Directors and its advisors relating to allegations concerning the accuracy of SunEdison, Inc.’s anticipated financial position based on certain issues raised by former executives and current and former employees of SunEdison, Inc. (the “SUNE-Related Matters”).
On March 16, 2016, SunEdison, Inc. announced a further delay in filing its Form 10-K. SunEdison, Inc. stated that this delay is principally due to the additional scope of work required from the identification by SunEdison, Inc.’s management of material weaknesses in its internal controls over financial reporting, primarily due to deficient information technology controls in connection with newly implemented systems (the “SUNE-Internal Control Matters”). Because of these material weaknesses, additional procedures are necessary for SunEdison, Inc.’s management to complete SunEdison, Inc.’s annual financial statements and related disclosures, and in order for SunEdison, Inc.’s independent registered accounting firm to finalize its audits of SunEdison, Inc.’s annual financial statements and the effectiveness of internal controls over financial reporting as of December 31, 2015. SunEdison, Inc. also announced that they had not completed the SUNE-Related Matters, including the investigation described above. The timeframe for SunEdison, Inc.’s completion of work on the SUNE-Related Matters and the SUNE-Internal Control Matters has not been determined. As a result, we have been assessing whether, and to what extent, the SUNE-Related Matters and SUNE-Internal Control Matters has affected and could continue to affect the preparation and timing of completion of our financial statements.
Under the Management Services Agreement with SunEdison, Inc., our financial reporting and control processes rely significantly on SunEdison, Inc. systems and personnel. As a result, if there are control deficiencies at SunEdison, Inc., including with respect to the systems we utilize, it is necessary for us to assess whether those deficiencies could affect our financial reporting and, if so, address them to the extent necessary and appropriate prior to filing our Form 10-K.