Tepper Writes a Letter to the Twerps at $TERP

David is 100% right for calling bullshit on their recent strategy that seems to revolve around the world of SUNE, trying to keep those stupid bastards alive at the expense of their own shareholders.

I hope David gets 3 board seats and then proceeds to kick all of the C-level execs in the nuts, just before firing them.

Here are the excerpts of his letter.

We write in respect of Appaloosa Management LP’s holdings of TerraForm Power, Inc. common equity and senior notes.

Notwithstanding your explanation in the release, we find that “aligning the company’s strategic focus around acquiring projects from its Sponsor” offers little apparent benefit for TERP stakeholders and raises concern for obvious conflicts between the interests of TERP and its “Sponsor”, SunEdison (SUNE).

Until recently, TERP’s business purpose was to act as a vehicle to hold and finance a high quality portfolio of fully-developed wind and solar power assets that were supported by long-term power purchase agreements with large, investment-grade corporate counterparties. Isolating these projects within a ring-fenced vehicle made sense for both TERP and SUNE, as the most efficient cost of capital could be obtained by segregating them from the operational, developmental and construction risks of SUNE’s main operating businesses.

The July announcement of the acquisition of the Vivint Solar (VSLR) portfolio of residential rooftop assets marks an unfortunate departure from this business model and appears to serve the sole purpose of promoting SUNE’s desire to acquire VSLR’s development and operating assets, rather than enhancing the quality and value of TERP’s holdings.

Disclosure of the precise details of this acquisition plan is long overdue, as well. So too, are the details surrounding the distinct possibility that TERP will be forced to accept a note from SUNE (which is of dubious credit quality and market value) due to a shortfall in the market value of the assets to be delivered in the first leg of the VSLR portfolio transaction relative to the $922 million purchase price.

The reconfiguration of the lnvenergy transaction announced November 9th is no better for TERP stakeholders and is obviously intended for the sole benefit of SUNE. These modifications will hand­ off SUNE’s responsibility for a $388 million equity warehouse commitment to TERP — yet another departure from TERP’s traditional role of owning permanently-financed, income-producing assets.

We note the advertised increase in the number of independent directors on TERP’s board and trust that the Corporate Governance and Conflicts Committee will appropriately investigate these and any other related-party transactions to ensure that they are conducted for the benefit of TERP stakeholders.

Recent rumors of discussions between SUNE and VSLR regarding “strategic options” for the proposed merger transaction, if true, may represent an opportunity for the Committee to exercise its independence and relieve the financial pressures on both TERP and its “Sponsor” from this harmful transaction. Such efforts would be strongly supported by Appaloosa

On this news, TERP is through the roof, up almost 20%. SUNE, aka the “sponsor”, is higher too.