So I was reviewing the most recent 8-K from Quantum and unless I'm misunderstanding, it would appear that Samsung might wind up having Zephyr dumped back into their laps because they are in default on its obligations under the Turbine Supply Agreement.
On January 8, 2015, SPI and Zephyr notified Samsung of their assertion that Samsung is in default of its obligations under the Turbine Supply Agreement dated June 30, 2010, as amended, and the Operations and Maintenance Agreement dated May 22, 2012. Under the terms of the Operations and Maintenance Agreement, Samsung is contractually required to maintain an average availability at or above 96% for the wind turbines purchased by Zephyr from Samsung. As a result of specifically identified operating and maintenance issues during the past six month period that Samsung has acknowledged, the average availability is materially below the minimum contractual levels and therefore Zephyr will be entitled to certain compensatory payments under the terms of the contract.
When I've analyzed Quantum, I've been looking at Zephyr as an albatross around it's neck, placed there by prior management, who entered into this foolhardy, and non-core, business with Schneider..
But now Quantum is saying their are under no obligation to pay the interest on the $24 million (?) loan amount, and that the Zephyr project is backed with the assets as collateral.
The debt amounts due under the Master Amendment Agreement are secured by substantially all of Zephyr's assets and a pledge of all of the shares of Zephyr held by SPI. The Registrant has no obligation to service the debt payments and has not provided any guarantees associated with the debt obligation to Samsung.
Now that Schneider and it's Zephyr subsidiary have declared Samsung in default, it appears that Quantum has been severely impaired in marketing the project and it might be the next step that Samsung takes over the operation in order to salvage what's left of it's outstanding debt..
Either way, having compensation paid by Samsung (who knows the amount, but one would suspect it would represent the difference between current output and the required 96% uptime, Samsung will have to do something soon.
Either way, for the time being, this ends the bleeding from interest payments, and potentially opens the door for actually receiving a minimum amount of lost revenue compensation from Samsung.
Thoughts?
biz.yahoo.com
Hawk |
