Financial Governance – The Waterfall
At the 2022 AGM, TRESOC voted to implement a new waterfall process to determine the order of priority for disbursements to its various counterparties and stakeholders. The rationale is to ensure that TRESOC remains liquid and so can continue working for the community. As part of that, we would also like to ensure that when capital repayments are made, all shareholders of the same class are treated equally with regards to the available capital at any given moment. The proposed waterfall structure and wording is below.
TRESOC will operate the cash waterfall as described below when looking to make cash (re)payments. To highlight, interest to shareholders is payable at the board’s discretion, and only after line items 1-4 have been satisfied. Capital repayment to shareholders will only be made after interest payments to bond and shareholders, as applicable, have been completed. In some exceptional circumstances, the board may, at its discretion, choose to elevate the repayment of capital up the waterfall.
- Operating costs, including select projects in the community.
- Bank loans and capital repayments as applicable.
- Building up realistic cash reserves for replacement items such as inverters, damaged arrays, etc.
- Bond interest and capital repayment as applicable.
- Share interest (if the Board elects to pay interest in a given year).
- Share capital repayments. Please note, all cumulative repayments and processed repayment claims in a given year will be treated equally, and repayment will be made on a pro-rata basis to the amount of funds available as per this waterfall.
- Any remaining surplus will go to community projects, re-invested in the business/further reserves or as an accelerated capital repayment as best determined by the Board.
