Deposits for Acquisitions

9 Months Ended

Sep. 30, 2017

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

ACQUISITIONS

2017 Pending Acquisition

Acquisition of BioTherm

In April 2015, the Company entered into purchase and sale agreements to acquire a controlling interest in three operating power plants located in South Africa with an aggregate net capacity of 32.6 MW from BTSA Netherlands Coöperatie U.A. (“BioTherm”). The aggregate consideration payable for the controlling interests in these three power plants is approximately $75.1 million in cash, comprised of approximately $67.6 million and ZAR 100.4 million ($7.4 million as of September 30, 2017), plus 544,055 shares of the Company’s Class A common stock, which is fixed in accordance with the purchase and sale agreements. Additionally, a variable amount, which is estimated to be approximately $3.5 million , is due upon the completion of the transaction (the “Variable Amount”). The Variable Amount mainly represents customary working capital adjustments that have occurred between the date the Company entered into the purchase and sale agreements and the date that the transaction is completed. The aggregate consideration includes amounts for certain additional rights and services. No further consents are required with respect to the completion of the acquisition of the Klipheuwel wind power plant. However, the completion of the acquisition of the Aries and Konkoonsies solar power plants remains subject to obtaining consents from project lenders. The completion of the BioTherm transaction is expected to occur in the fourth quarter of 2017.

As of September 30, 2017, the remaining balance due upon the closing of the transaction was approximately $9.5 million (not including the Variable Amount), comprised of $2.0 million and ZAR 11.6 million ($0.9 million) due to BioTherm and ZAR 88.9 million ($6.6 million) due to minority interests. Prior to the completion of the BioTherm transaction, BioTherm is required to direct payment of all of BioTherm's pro rata share of the distributions from the Klipheuwel wind power plant to the Company, and the Company and BioTherm are required to jointly direct the release of amounts equal to BioTherm's pro rata share of the distributions from the Aries and Konkoonsies solar power plants from the escrow to the Company.

Pending receipt of the consents from the lenders to the Aries and Konkoonsies solar power plants, the Company may at its discretion direct a sale of these power plants to a third party. Due to the fact that the closing of the acquisition of these power plants did not occur by November 30, 2016, the parties have engaged in discussion to agree upon an alternative structure that would permit release of the escrowed funds as required pursuant to the applicable purchase and sale agreements. Failure to complete these acquisitions, or to reach agreement upon an alternative structure that would permit release of the escrowed funds, by November 30, 2017 would entitle BioTherm to sell the Aries and Konkoonsies solar power plants to a third party. Upon closing of a sale to a third party, all sale proceeds are required to be paid to the Company, any amounts remaining in the escrow account are required to be released to BioTherm and the Company is required to pay the remainder of the purchase price.

2016 Acquisitions and Dropdowns

Dropdown of NPS Star and WXA

On February 24, 2016, SunEdison transferred to the Company a 49.0% equity interest, constituting a controlling interest and substantially all of the economic interest, in each of NPS Star and WXA, each of which consists of three solar power plants located in Thailand. These solar power plants, which achieved commercial operation in December 2015 and represent 35.6 MW of aggregate net capacity, were required to be contributed to the Company, without further payment, pursuant to the Project Investment Agreement between SunEdison and the Company.

Acquisition of Alto Cielo

On April 8, 2016, the Company completed the acquisition of a 100.0% ownership interest in the Alto Cielo solar power plant located in Uruguay with an aggregate net capacity of 26.4 MW from Solarpack Corporación Tecnológica, S.L. The power plant reached commercial operation in March 2016. The aggregate cash consideration paid for the Alto Cielo power plant was $32.3 million, of which $1.1 million was being held in escrow accounts as of September 30, 2017 until certain conditions are met.

The acquisition date allocation of assets and liabilities for the Alto Cielo solar power plant is as follows:



	2016
(In thousands)	Alto Cielo
Cash and cash equivalents	$	190
Restricted cash	1,923
Accounts receivable	311
Power plants	35,414
Other assets	2,738
Total assets acquired	40,576
Accrued expenses and other current liabilities	3,670
Deferred tax liabilities	557
Long-term debt, including current portion	4,031
Total liabilities assumed	8,258
Fair value of net assets acquired	$	32,318

Transfer of Balance of Equity in Certain Power Plants in India

In April 2016, SunEdison transferred to the Company the balance of 51.0% of the equity interests in the NSM Suryalabh, NSM Sitara and NSM L’Volta solar power plants in India following the expiration of the equity lock-up period in the applicable PPAs. Consideration for the transfer of the balance of 51.0% of the equity interests in these power plants was received by SunEdison in the form of shares of the Company’s Class B common stock that were issued to SunEdison at the time of the Company's IPO, and there was no further payment made by the Company to SunEdison at the time of the transfer.

In October 2016, SunEdison sold to the Company 11.0% of the equity interests in the Millenium solar power plant in India for cash consideration of approximately $1.0 million. In addition, SunEdison transferred to the Company the balance of 51.0% of the equity interests in the Focal solar power plant in India following the expiration of the equity lock-up period in the applicable PPAs, at which time the Company was required to make a cash payment of $0.5 million to the original project developer, a third party. Consideration for the transfer of the balance of 51.0% of the equity interests in the Focal power plant was received by SunEdison in the form of shares of the Company’s Class B common stock that were issued to SunEdison at the time of the Company's IPO, and there was no further payment made by the Company to SunEdison at the time of the transfer.

In October 2016, the Company also entered into arrangements with SunEdison for the transfer of the balance of the equity interests in the Millenium, Azure, ESP Urja and SE 25 solar power plants in India, in each case following the expiration of the equity lock-up period in the applicable PPAs (ranging from November 2016 to March 2017) and without further action by SunEdison. Consideration for the transfer of the balance of the equity interests in these power plants was received by SunEdison in the form of shares of the Company’s Class B common stock that were issued to SunEdison at the time of the Company's IPO, and there was no further payment made by the Company to SunEdison at the time of the transfers. In accordance with these arrangements, in November 2016, December 2016 and January 2017, the balance of 26.0% of the equity interests in Azure, ESP Urja and Millenium, respectively, was transferred to the Company. In March 2017, 100.0% of the equity interests in SE 25 were transferred to the Company.

Termination of Renova - ESPRA

On March 29, 2016, the Company entered into a Termination Agreement (the “Termination Agreement”) with Renova with respect to the Securities Purchase Agreement dated July 15, 2015 among the Company, SunEdison and Renova relating to the ESPRA hydro-electric power plant (the “ESPRA SPA”). The Termination Agreement provides that, subject to the satisfaction of certain conditions, the ESPRA SPA will be terminated by mutual agreement of the Company and Renova. These conditions were satisfied on March 31, 2016 and the ESPRA SPA has been terminated. The Termination Agreement provides that the Company will pay Renova $10.0 million in connection with the termination of the ESPRA SPA. The Company made this payment to Renova on April 1, 2016. Pursuant to the Termination Agreement, the Company and Renova have granted each other full releases of any further obligations under the ESPRA SPA.

DEPOSITS FOR ACQUISITIONS

Deposits for acquisitions consist of:



	As of September 30,			As of December 31,
(In thousands)	2017			2016
India PSA payment to SunEdison	$	231,000		$	231,000
BioTherm payment	51,101			51,101
Total deposits for acquisitions	282,101			282,101
Less: provision for contingent loss	(231,000		)	(231,000		)
Less: BioTherm distributions	(4,858		)	(2,827		)
Total deposits for acquisitions, net	$	46,243		$	48,274

425 MW India Projects

On November 20, 2015, the Company and SunEdison Holdings Corporation entered into an Equity Interest Purchase and Sale Agreement pursuant to which the Company agreed to acquire from SunEdison Holdings Corporation a portfolio of 17 solar energy projects in India with an aggregate nameplate capacity of 425 MW (the “425 MW India Projects”). This agreement was subsequently amended and restated on December 1, 2015. Pursuant to the Amended and Restated Equity Interest Purchase and Sale Agreement (the “India PSA”), the Company paid $231.0 million in cash to SunEdison Holdings Corporation in the fourth quarter of 2015 in exchange for the 425 MW India Projects, which projects would be transferred to the Company upon satisfaction of certain conditions precedent.

During 2016, and beginning prior to the SunEdison Bankruptcy, the Company became aware that there was substantial risk that the 425 MW India Projects would not be completed and transferred to the Company in accordance with the India PSA.

In April 2016, the Company filed a verified complaint against SunEdison, SunEdison Holdings Corporation (collectively with SunEdison, the “SunEdison Defendants”), Ahmad Chatila, Martin Truong and Brian Wuebbels in the Court of Chancery in the State of Delaware (see Note 15 - Commitments and Contingencies). The complaint asserts claims for breach of fiduciary duty, breach of contract and unjust enrichment relating to the failure by SunEdison to transfer the equity interests in the 425 MW India Projects, for which the Company paid $231.0 million in the fourth quarter of 2015. The complaint seeks various forms of relief, including a constructive trust upon the equity interests of SunEdison in the 425 MW India Projects, money damages from the defendants, restoration of the $231.0 million to the Company and such other relief as the Court may deem just and proper. The claims against SunEdison have been stayed as a result of the SunEdison Bankruptcy. The individual defendants filed an answer to the complaint on June 30, 2016. On July 19, 2017, the Company entered into a settlement agreement with the individual defendants, pursuant to which the parties exchanged mutual releases. The Court entered an order dismissing the individual defendants with prejudice on July 20, 2017.

The Settlement Agreement includes a release by the Company of its claims against the SunEdison Defendants, including all of the Company’s claims relating to the 425 MW India Projects, and if the Settlement Agreement becomes effective the Company will not recover any amounts on these claims outside of the consideration received under the terms of the Settlement Agreement. If the Settlement Agreement is terminated, the Company expects to continue to pursue its claims against the SunEdison Defendants.

The $231.0 million paid by the Company in accordance with the India PSA is reported as a deposit for acquisitions on the Company’s unaudited condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016. The Company determined that the deposit for acquisition of the 425 MW India Projects was impaired as of December 31, 2015, and recorded a provision for contingent loss of the full $231.0 million in the consolidated balance sheet as of December 31, 2015. The Company also recorded a corresponding charge in the consolidated statement of operations for the year ended December 31, 2015. The provision for contingent loss remained on the unaudited condensed consolidated balance sheet as of September 30, 2017.

In September 2016, the Company reached an agreement with certain subsidiaries of SunEdison pursuant to which the Company consented to the sale of certain of SunEdison’s subsidiaries’ assets to a third party buyer (the “Third Party Sale Transaction”). The Third Party Sale Transaction was conducted in connection with SunEdison’s bankruptcy process and included the 17.4 MW Del Litoral and 57.4 MW El Naranjal solar power projects in Uruguay, the 24.1 MW Bora Bora Poly wind power project in India and the 425 MW India Projects. The Company has agreed not to pursue claims against a third party buyer of these projects, however the Company has retained all of its claims against SunEdison and its affiliated persons. As a condition to the Company’s consent to the Third Party Sale Transaction, the Company and certain subsidiaries of SunEdison that directly or indirectly own the assets that are subject to the Third Party Sale Transaction have entered into a proceeds sharing arrangement pursuant to which the Company is entitled to receive a portion of the cash proceeds received by the SunEdison parties in the Third Party Sale Transaction. In September 2016, the Company received $6.7 million in cash proceeds from this arrangement. The Company has not received, and does not expect to receive, any additional cash proceeds from this arrangement going forward.

BioTherm

In August 2015, the Company paid $65.6 million in cash for the interests in the Aries and Konkoonsies solar power plants and the Klipheuwel wind power plant, as well as certain additional rights. In addition to the cash consideration, the Company provided 544,055 shares of its Class A common stock as consideration for the interests in the three power plants. In accordance with the funding arrangements, during the first and third quarters of 2017 the Company received $1.3 million and $1.7 million, respectively, from the escrow account holding the purchase consideration for the Aries and Konkoonsies solar power plants, which reduced the outstanding balance of the escrow account from $16.4 million as of December 31, 2016 to $13.4 million as of September 30, 2017. Cash paid to the escrow account is reported as non-current restricted cash in the Company’s unaudited condensed consolidated balance sheet. Additionally, in the first and third quarters of 2017, the Company received distributions equaling $1.2 million and $1.1 million, respectively, from BioTherm with respect to the Klipheuwel wind power plant. The remaining paid consideration of $40.3 million in cash and the August 2015 fair value of the 544,055 shares are reported as a deposit for acquisitions on the Company’s unaudited condensed consolidated balance sheet as of September 30, 2017. See Note 2 - Acquisitions for additional details related to this acquisition.